OPEC member Qatar expects to lower oil output to about 500,000 barrels per day (bpd) by the end of November, down from 650,000 at the end of last month and from 800,000 a month earlier, an industry source familiar with the matter said.
The reduction to 650,000 was decided because of market oversupply, with the second to 500,000 made necessary by refinery maintenance, the source said. Qatar’s maximum production capacity is 800,000.
“The market is oversupplied and this is why we cut down in October. We found that there’s generally less demand,” the source said.
With maintenance due at Qatar’s Mesaieed refinery, production is expected to drop to around 500,000 bpd.
Despite rising world demand, OPEC expects demand for its oil to fall in 2015 as higher supply outside the group, particularly in the United States due to its shale energy production, squeezes OPEC’s market share.
Qatar appears to be the only Gulf OPEC state that has started to informally cut output.
In a speech on Wednesday, Saudi Arabia’s Oil Minister Ali al-Naimi broke months of silence to reaffirm the kingdom’s longstanding policy of seeking stable global markets, dismissing talk of a “price war” but offering no insight on his response to tumbling crude prices, or what OPEC will decide later this month.
OPEC members including Kuwait have said a cut in output at an OPEC meeting set for Nov. 27 is unlikely, but privately delegates are starting to talk of the need for some action, although they warn an agreement will not be easy to reach.