Saudis to Press OPEC for a Million-Barrel Cut in Oil Production

VIENNA — Saudi Arabia is poised to advocate that OPEC cut oil production by about a million barrels a day — roughly 1 percent of the global oil supply — as the group begins discussions on Thursday on ways to keep supply and demand in balance.

Khalid al-Falih, the Saudi energy minister, said Thursday morning that “all options” are on the table but that a reduction of one million barrels was “adequate” to balance the markets. He added that he had heard a range of numbers discussed, from 500,000 to 1.5 million barrels a day.

Mr. Falih, whose country represents 12 percent of global oil output, said that he had met with the American special envoy Brian Hook on Wednesday. He noted that Mr. Hook had “refrained” from asking the Saudis not to cut production, but quickly added, “I don’t need permission to cut.”

The two men discussed several issues, including Washington’s plans to carry out sanctions on Iran.

With OPEC expected to meet through the afternoon, oil prices dropped sharply Thursday morning. Brent crude, the international benchmark, dropped about 3 percent to $59.72 a barrel, and WTI was down a 3.2 percent to $51.26 a barrel.

“Markets are greedy,” said Roger Diwan, a vice president for oil market strategy at the research firm IHS Markit. “They want certainty that you have a large enough cut to change the direction of prices. They haven’t heard that yet.”

OPEC has been whipsawed by competing pressures lately. On one hand, the world is widely viewed as having an oil glut substantial enough to justify a cut in production.

Keep reading this article on The New York Times Business.

Leave a Reply