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Return to oil production cuts in 2019 cannot be ruled out - OPEC sources

Reuters  |  LONDON 

By Alex and Ahmad Ghaddar

LONDON (Reuters) - A return to by OPEC and its allies next year cannot be ruled out, two OPEC sources said on Wednesday, to avert a possible supply glut that could weigh on prices.

The sources were responding to a report by Russia's agency that and had started bilateral discussions over possible curbs to output in 2019.

Saudi-led OPEC and its allies including decided in June to relax output curbs in place since 2017, after pressure from U.S. to reduce and make up for supply losses from

Asked whether discussions pointed to a return to supply cuts in 2019, one of the two sources, who are delegates from the Organization of the Petroleum Exporting Countries, said: "Certainly not the other way around."

have come under downward pressure from rising supplies, even though Iranian exports are expected to fall because of new U.S. sanctions. Forecasts of a 2019 supply surplus and slowing demand have also dented the market.

Brent crude had dropped from a four-year high in October above $86 a barrel to $71 on Tuesday. Prices rallied back above $73 on Wednesday, supported by the report.

Separately, a top OPEC from Iran, which has been angered by higher production in and in response to Trump's calls, said and needed to cut output by 1 million barrels per day.

"There is no other way for and Russia," Hossein Kazempour Ardebili, who represents on OPEC's board of governors, told when asked whether producers needed to trim output in 2019.

The extra supply has caused a drop in crude prices, hurting income for other while helping Iran's foe Trump in the U.S. midterm elections, Kazempour said.

"They pushed the prices $15 a barrel lower in one month and only made U.S. gasoline cheaper for Trump. They lost billions on revenue and caused losses to poor producers in and South America," he said.

A ministerial committee of some OPEC members and allies meets on Sunday in to discuss the market and outlook for 2019. is not a member of this committee, which it wants scrapped.

This group, called the JMMC, could make a recommendation on 2019 output policy to the next decision-making meeting of OPEC and non-OPEC oil ministers, a third OPEC source said. That meeting takes place on Dec. 6-7 in

"Any serious discussion will be towards the December meeting," this source said.

(Editing by Dale Hudson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, November 07 2018. 21:08 IST