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

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

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.

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