OPEC's top producer Saudi Arabia has signaled that it is prepared to cut its oil production even deeper than it is cutting now, Nigerian oil minister Timipre Sylva told Bloomberg TV on Tuesday, citing a recent conversation he had with Saudi Energy Minister Prince Abdulaziz bin Salman.
"He assured me that they are very ready to even cut deeper," Nigerian Minister of State for Petroleum Resources, Timipre Sylva, told Bloomberg, noting that they did not talk about any new production levels at a meeting on Monday.
The ministers discussed "the situation of the oil market and joint cooperation among OPEC countries to maintain its stability," the official Saudi Press Agency reported.
As the crucial meeting of OPEC and its Russia-led non-OPEC partners in the deal draws closer, speculation is already rife that the allies will have little choice but to extend the cuts currently expiring in March 2020 and possibly to cut even deeper, considering the slowing oil demand growth and still persistent oversupply on the market.
Russia, however, is still non-committal, as it has been ahead of all previous OPEC+ meetings. Russia's Deputy Energy Minister Pavel Sorokin said earlier this week that it was too early to talk about a potential deepening of the cuts because the production cut mechanism is not limitless. Related: A ''Gusher Of Red Ink'' For U.S. Shale
"The OPEC+ mechanism has shown that it is efficient, but it cannot be efficient forever," Sorokin said, noting that the OPEC+ coalition will monitor and take into account the slowing U.S. production growth at the December meeting.
Russia's 'it's-too-early-to-say' position led Warren Patterson to say "It does seem that it is going to be a repeat of previous meetings, where there is uncertainty about where Russia stands regarding those cuts,".
According to ING, OPEC and allies need to take further action in December to support prices and draw down inventories, but convincing all producers to cut even more could be a challenge.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More