Saudi Energy Minister Khalid al Falih said on Monday OPEC and its allies were in agreement that technical analysis shows the need to balance the market by reducing oil supply next year by around one million barrels per day versus October levels.
"The technical analysis we reviewed yesterday shows that we need a reduction approaching one million bpd to balance the market," Khalid al-Falih told an energy conference in Abu Dhabi.
Falih said Saudi Arabia, the world's largest oil supplier, will cut its production by 500,000 bpd as of next month to help stabilize the market.
Falih was speaking at the Abu Dhabi International Petroleum Exhibition & Conference.
United Arab Emirates, Suhail al-Mazrouei, currently the president of OPEC. similarly said "changes" would likely be necessary as OPEC meets in December in Vienna. However, he added: "We need not to overreact when these things happen."
Al-Falih said OPEC officials have seen analysis papers suggesting a production cut of upward of 1 million barrels of crude a day may be necessary to rebalance the market.
However, he stressed that more study needed to be done. Crude oil dropped to a low of $30 a barrel in January 2016.
That forced OPEC to partner with non-OPEC countries, including Russia, to cut production to help prices rebound.
Benchmark Brent crude, which had been trading above $80 a barrel recently, now hovers just over $70 after the U.S. sanction waivers on Iran.
Meanwhile, Sultan Ahmed al-Jaber, the head of the state-run Abu Dhabi National Oil Co., said the UAE planned to increase oil production to 4 million barrels of oil a day by 2020 and 5 million barrels a day by 2030. The UAE now produces some 3 million barrels of oil a day.
Al-Jaber also said the UAE would begin fracking - injecting high-pressure mixtures of water, sand or gravel and chemicals - to gain access to otherwise unreachable natural gas reserves.
"Make no mistake: Hydrocarbons will continue to play an absolutely essential part of a diversified energy mix," al-Jaber said.
(With AP, Reuters)