Saudi Arabia Denies OPEC+ December Production Increase Rumors: "Will Intervene Anytime If Additional Cuts Needed"

International Oil Prices Plunging Over 6% Narrow Losses
UAE Continues Production Increase Demand... Further Cuts Seem Difficult

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Saudi Arabia has completely denied the possibility of an oil production increase by the Organization of the Petroleum Exporting Countries Plus (OPEC+) in December, which was raised by some Western media. On the contrary, it even suggested the possibility of additional production increases, stating that it would intervene in the market whenever necessary if an increase is needed in the future. After falling by more than 6% following the market opening, international oil prices significantly reduced their losses and closed with a slight decline.

According to the Saudi state news agency SPA on the 21st (local time), Saudi Energy Minister Abdulaziz bin Salman denied the December production increase rumors raised by some Western media such as The Wall Street Journal (WSJ) at a press conference that day. Minister Abdulaziz explained, "It is well known that OPEC+ does not discuss any decisions before the meeting," denying that there was any discussion about increasing production.

Earlier, WSJ reported, citing OPEC+ delegates, that a proposal to increase production by up to 500,000 barrels per day was being considered at the OPEC+ production decision meeting scheduled for the 4th of next month. Immediately after the report, international oil prices plunged by more than 6%, but the losses were significantly reduced after Minister Abdulaziz denied the report.

On the same day, West Texas Intermediate (WTI) crude oil on the New York Mercantile Exchange (NYMEX) closed at $79.73 per barrel, down 0.44% from the previous session. Brent crude oil on the London ICE exchange was also trading down 0.4% at $87.45 per barrel.

Minister Abdulaziz even raised the possibility of additional production cuts. He emphasized, "The current OPEC+ production cut policy of 2 million barrels per day is planned to continue until the end of next year, and we are always ready to intervene if further production cuts are necessary."

However, it is expected to be difficult to implement additional production cuts as oil demand is forecasted to decline from next year due to recession concerns, and the United Arab Emirates (UAE), which along with Saudi Arabia has a significant influence on OPEC+ price decisions, continues to demand increased production.

According to CNN, the UAE has reportedly requested OPEC+ member countries to consider increasing production since March. The UAE currently has the capacity to produce about 4.5 million barrels per day and plans to expand production to 5 million barrels per day by next year, but production is limited to 3 million barrels per day under the OPEC+ production cut agreement.