Saudi Arabia and its Gulf neighbours assessed the impact of Opec's recently agreed 1.2 million barrels per day output cut on Wednesday and whether a further reduction will be needed before year end. Officials dismissed a US government agency report Opec would push through barely 60 percent of the planned supply curb.
"All of Opec is committed," United Arab Emirates' Oil Minister Mohammed bin Dhaen al-Hamli told reporters after talks involving oil ministers of the Gulf Co-operation Council.
The US Energy Information Administration said on Tuesday even Saudi Arabia, Opec's most disciplined member and the world's biggest oil exporter, would fail to carry out its full portion of the supply curb. Saudi officials rejected that view.
"Saudi Arabia is implementing its 380,000 barrels per day cut in full," a Saudi source said. Investors are beginning to waver in their initial belief that Opec's October 20 agreement is not worth the paper it is written on. US crude was up 17 cents at $59.10 on Wednesday.
Saudi Arabia and other Gulf Opec members have said they see scope for further supply cuts when Opec next meets on December 14, pointing to high fuel stocks in top consumer the United States as evidence the market remains oversupplied. "What we are concentrating on now is balancing supply and demand," Qatari Oil Minister Abdullah al-Attiyah told reporters.
High global inventories were partly responsible for oil's 25 percent drop from a July peak of $78.40 a barrel. The speed of the decline forced Opec to agree its first output cut in two years at an emergency meeting in Qatar last month.
Saudi Oil Minister Ali Al-Naimi says bringing inventories in consumer nations into equilibrium is the main aim of the group that pumps more than a third of the world's oil. Gulf oil ministers have carefully avoided mentioning a target price for their oil, but Opec delegates say Saudi Arabia prefers a level above $50 for Opec's basket of crudes. That would equate to about $55 for US crude.
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