Oil price rebounded to $73 per barrel yesterday after falling to its lowest since August, supported by a report that Russia and Saudi Arabia are discussing oil output cuts in 2019.
Russia’s TASS news agency, citing an unnamed source, reported that the two countries, the biggest producers in an OPEC-led alliance that has been limiting supply since 2017, have started bilateral talks on the issue.
Brent crude, the global benchmark, rose 91 cents to $73.04 a barrel after hitting $71.18 on Tuesday, its lowest since August 16. US crude rose 58 cents to $62.79.
While Iranian oil exports are expected to fall because of US sanctions that took effect on Monday, reports from OPEC and other forecasters have indicated that the global market could see a 2019 supply surplus as demand slows.
Reuters reported that a ministerial committee of some OPEC members and allies, including Russia and Saudi Arabia, is due to meet on Sunday in Abu Dhabi to discuss the market and outlook for 2019.
Any return to limiting supply would follow a June decision by the OPEC-led group to relax output curbs in place since 2017, after pressure from U.S. President Donald Trump to cool prices and make up for losses from Iran.
Supply from countries such as Saudi Arabia has risen sharply since June. In addition, having initially talked of cutting Iranian oil shipments to zero, Washington gave waivers to eight customers, raising the prospect of more Iranian oil in the market than expected.