Following a drop in crude prices, oil producing countries should cut output by one million barrels per day (bpd) to re-balance the market, Saudi Arabia's energy minister Khalid al-Falih told at an energy conference in Abu Dhabi today.
He added Saudi Arabia, the world's largest oil supplier, will cut its production by 500,000 bpd as of next month to help stabilize the market.
Oil lost almost 1/5th of its value over past month
"The technical analysis we reviewed yesterday shows that we need a reduction approaching 1mn bpd," said Khalid. Oil lost almost a fifth of its value over the past month due to oversupply and signs of a softer-than-expected impact from US sanctions on Iranian crude exports.
Russia, Saudi warn crude supply would outstrip demand next year
Major producers, including Russia and Saudi Arabia, yesterday warned that crude supply would outstrip demand next year, at a joint OPEC non-OPEC ministerial monitoring committee meeting in Abu Dhabi.
Khalid today said there had been a marked buildup in inventories, adding that "the 25 producers won't allow this to continue" and that there were "signals" they would do "whatever it takes to balance market".