Riyadh Says Many Nations Will Join OPEC Output Cuts

Many nations are willing to join OPEC in cutting production to secure a continued improvement in oil prices, said Saudi Arabia’s Minister of Energy and Industry Khalid Al-Falih.

The minister did not name any countries in his speech at the Oil & Money conference in London, saying only that negotiations will continue until the scheduled Nov. 30 meeting of the Organization of Petroleum Exporting Countries in Vienna, Bloomberg reported.

So far, only Russia has said it is considering an output freeze or a reduction, while other non-OPEC producers that cooperated with past supply curbs, including Mexico and Norway, said they will not cut, Bloomberg reported.

“We are going to work with our colleagues and the decision I think will be fair and equitable to all countries,” Al-Falih said. Saudi Arabia will not decide alone how much production it should cut because “this is a collective decision that we have to make.”

Al-Falih painted an upbeat picture, telling a packed audience that included the chief executive officers of Exxon Mobil Corp., Chevron Corp. and Total S.A. that the oil market is "clearly rebalancing," bringing the industry to the end of a "considerable downturn."

US crude inventories are declining and supply and demand are coming back into line, he said.

Oil has fluctuated near $50 a barrel amid uncertainty about whether OPEC will be able to implement an accord to reduce supply at an official meeting in November.

There is no possibility that Russia will pull out of its agreement to cooperate, OPEC Secretary-General Mohammed Barkindo said this week.

Oil producing countries can secure a "healthy" price increase with a small percentage output cut, Al-Falih said.

The consensus among executives, traders and officials gathered at the annual Oil & Money conference was that the world should get used to oil prices between $50 and $60. Falling costs in the US shale fields will counteract OPEC’s renewed commitment to supply management, keeping a lid on prices, they said.