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Saudi Arabia didn't make output cut proposal: Saudi source to Arabiya TV
January 31, 2016 / 8:06 AM / 2 years ago

Saudi Arabia didn't make output cut proposal: Saudi source to Arabiya TV

DUBAI (Reuters) - Saudi Arabia was not the source of a proposal to cut oil production that Russia was studying, al-Arabiya television reported on Sunday, quoting an unnamed Saudi source.

Shaybah oilfield complex is seen at night in the Rub' al-Khali desert, Saudi Arabia, November 14, 2007. REUTERS/ Ali Jarekji

But the kingdom, the world’s biggest oil exporter, wanted to cooperate with other producers to support the oil market, the source also told the Saudi-owned and Dubai-based satellite channel.

Russian Energy Minister Alexander Novak said on Thursday that OPEC had proposed output cuts of up to 5 percent to help reduce a glut of crude and prop up sinking prices, in what would be the first such deal globally in over a decade.

It was not clear if Novak was referring to a months-old proposal by OPEC members Venezuela and Algeria, or a new one backed by Saudi Arabia. Sunday’s Arabiya report implied the proposal was not new.

The Saudi source’s comments were in line with remarks made by a senior Gulf OPEC delegate to Reuters on Thursday.

Saudi Arabia has long said it is willing to act to stabilize prices but that the other countries, particularly higher-cost producers, must also reduce their output.

The possibility of supply restraint by producers boosted oil prices to almost $36 a barrel last week from a 12-year low close of $27.

But there is widespread scepticism that a deal will happen, especially since Iran is keen to boost its market share now that sanctions on it have been lifted.

Reporting by Hadeel al-Sayegh, Writing by Andrew Torchia; editing by John Stonestreet

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