Saudi Arabia's newly appointed Energy Minister Prince Abdulaziz bin Salman said on Thursday that talks of deeper output cuts is possible at OPEC's next ministerial in December, while also downplaying concerns about 2020 demand forecasts.
"Booming shale production has allowed the U.S.to close in on, and briefly overtake, Saudi Arabia as the world's top oil exporter.in June, after crude exports surged above 3 million bpd", the agency, which advises industrial economies on energy policy, said in its monthly report.
Iraqi Oil Minister Thamer Ghadhban said the Organization of the Petroleum Exporting Countries would discuss whether to deepen cuts when ministers meet on Thursday.
A meeting of OPEC and OPEC+ countries in Abu Dhabi this week "is stirring up hopes for additional supply cuts", said Stephen Innes, Asia Pacific market strategist at AxiTrader. Asked about whether a thaw between the US and Iran could affect energy markets after Trump's firing of national security adviser John Bolton, Prince Abdulaziz said the committee spoke about it.
Russian Energy Minister Alexander Novak said Thursday that the OPEC+ alliance has managed in the past to "adapt and react to the changing market conditions". Despite doom and gloom predictions about global demand and record USA production, US crude supplies are below average.
"Oil prices are down on concern that the USA administration could ease its stance versus Iran, which could see disrupted Iranian oil barrels returning to the market if United States sanctions against Iran get eased".
This is despite most bottom-up analysis of the crude market based on supply and demand fundamentals pointing to higher prices, at least for the rest of 2019.
Dubbed OPEC+, the 24-member alliance decided past year to cut output by 1.2 million barrels per day (bpd) from January 2019, to boost prices after they fell by more than 40 percent.
Crude inventories fell for a fourth straight week, decreasing 6.9 million barrels in the week to September 6, more than double analysts' expectations for a 2.7 million-barrel drawdown. That's a nod toward the trade war between China and the US, which has seen billions of dollars in tariffs levied between them.
"This outcome would make OPEC+ target to keep the oil market in balance even more challenging in 2020".
The policy has given a sustained boost to United States shale and other rival supply, and the report suggests the world will need less OPEC crude next year. A year earlier, they were at 2.1 million bpd.