How Saudi Arabia is throwing its weight around in oil markets today

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An official from group member Kuwait said on Monday major oil exporters over the weekend had "discussed a proposal for some kind of cut in (crude) supply next year", although the official did not provide any detail.

Oil rose by more than 1 per cent on Monday, set for its largest one-day increase in a month after Saudi Arabia said OPEC and its partners believed demand was softening enough to warrant an output cut of 1 million barrels per day. "The consensus is that we need to do whatever it takes to balance the market".

But they climbed on Monday as the world's biggest supplier Saudi Arabia announced plans to cut production in response to fears of oversupply.

The worry: The Organization of the Petroleum Exporting Countries (Opec), which includes Saudi Arabia and Iraq and Iran, and other non-Opec oil producers such as Russian Federation met in Abu Dhabi on Sunday to discuss oil cuts.

A majority of OPEC and allied oil exporters support a cut in the global supply of crude, Oman Oil Minister Mohammed bin Hamad al-Rumhi said on Sunday.

Global oil producers - including OPEC and Russian Federation - pump out roughly 100 million barrels of oil per day, so a 1% cut in production might not seem like a big deal.

Russian Federation is now pumping about 10,000 to 20,000 barrels a day below October levels, and demand from customers is "fairly stable", Novak said.

U.S. West Texas Intermediate (WTI) crude oil futures were at 60.73 dollars per barrel, up by 54 cents, or 0.9 per cent from their last settlement. Turn about: Opec members and its 10 allies are mainly anxious about the increasing USA production (11.4 million barrels a day). In the meantime, the Kingdom said it is taking the lead by cutting its output to 500,000 barrels a day come December.

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But producers eased output cuts in June after signs of a tighter market and higher prices, selling hundreds of thousands of extra barrels.

Falih said they would then decide whether to adjust production and by how much.

Kazakh deputy energy minister Magzum Mirzagaliyev told reporters in Abu Dhabi that he understood Saudi Arabia was suggesting using August-October output levels as a baseline for determining cuts.

Falih said the United States sanctions had removed less oil from the market than expected because of the waivers.

The outlook for oil, a key source of revenue for Russian Federation and Saudi Arabia, is adding a fresh twist for a market already obsessed with Federal Reserve tightening and the U.S.

"The recent drop in oil prices reflects a combination of factors".

The UAE's Mazrouei said the goal of OPEC and non-OPEC cooperation was to strike a balance in the market.

"If they fail to signal any intention to reverse the latest increase in production, oil prices threaten to slide further", the bank said in a note.

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