They call it production adjustments, but in reality most major oil extracting countries agreed Sunday new strategies regarding crude output were needed in light of the surplus accrued over the past few months.
“Many of us share this view,” said Oman Oil Minister Mohammed bin Hamad al-Rumhi on Sunday in Abu Dhabi at an oil market monitoring committee meeting.
Meanwhile, Khalid al-Falih, Energy Minister of Saudi Arabia, announced the kingdom would cut its production by 500,000 barrels per day.
Suheil al-Mazrouei, energy minister of the host country UAE, hinted that producers are preparing to cut output. A new strategy needs to be formed... whether it is a cut in production or something else, but it will not be an increase in production, he said.
A decision is expected when OPEC and non-OPEC ministers meet in Vienna on December 5 to assess the global energy market.
Oil prices have shed a fifth of their value in just one month after surging to a four-year high in early October, driven by a combination of factors centred on higher supply and fears of sluggish demand.
Saudi Arabia has been pumping 10.7 million bpd since October, Falih said.
Ahead of the meeting, he acknowledged that so far there was no new deal to cut production among OPEC and non-OPEC producers, who struck an agreement in late 2016 to cut output by 1.8 million bpd to tackle an oversupply crisis.
Brent crude dropped below $70 a barrel on Friday for the first time since April, while the New York's West Texas Intermediate (WTI) sank below $60 a barrel, a nine-month low.
In his speech at the start of the meeting, Falih said the recent sharp drop in prices had surprised us.
The UAE's Mazrouei said the goal of OPEC and non-OPEC cooperation was to strike a balance in the market.
The latest price slump comes after the United States boosted production of shale oil, while Saudi Arabia, Russia and others raised supplies of crude amid signs of slowing demand.
There have also been signs that renewed US sanctions on Iranian oil exports may have a softer-than-expected impact.
Producers implemented large cuts starting at the beginning of 2017 and managed to push up oil prices from below $30 a barrel to over $85 in October, strongly improving their revenues. But they eased output cuts in June out of fear of shortages.
We need a consensus, said the Omani delegate, indicating that non-OPEC Russia would need to approve any decision. Oman is also not a member of the Organization of the Petroleum Exporting Countries.
Russian Energy Minister Alexander Novak estimated his country's average daily oil production in November will be about 10,000 barrels less than that in the previous month.
In general, in November the output is expected to be slightly less than the October level, Novak was quoted as saying.
According to official statistics, Russia's oil production in October averaged 11.4 million barrels per day, approaching an all-time high.
Russia has been increasing oil output in recent months, as allowed by a joint decision from OPEC and non-OPEC countries to resume production.