Saudi Arabia : Neil Wilson of Markets.com points out that any official oil output cut will require co-operation between Opec members, and Russia too.
As mentioned earlier, Moscow may not be persuaded that they should cut production to get the oil price up again.
“Saudi Arabia has announced a cut to December crude output, a sign that it’s prepared to curb production to stem the decline in oil prices. The country will pump 500,000 barrels a day fewer next month than it has been in November
Brent rallied from 7-month lows at just above $69 to trade above $71.50. Having found support at $59.30, US crude has firmed to $61 but is struggling hold that handle.
In the short term this is a positive for oil, but we must question the impact longer term unless it’s the sign of more to come from OPEC.
Saudi Arabia cannot act alone though – realistically it needs to pull together OPEC allies and, critically, Russia to curb production if it wants prices to hold. The language from Russia suggests it is not ready to follow the Saudis yet.
