Oil rose by more than 1% today, set for its largest one-day increase in a month after Saudi Arabia said OPEC and its partners believed demand was softening enough to warrant an output cut of 1 million barrels a day.
Saudi Arabia, the world's largest oil exporter, said on Sunday it would cut its shipments by half a million barrels per day in December due to seasonal lower demand.
Brent crude futures rose 92 cents on the day to $71.10 a barrel this morning, while US crude futures rose 50 cents to $60.69 a barrel.
Saudi Energy Minister Khalid al-Falih said today that OPEC and its partners agree that technical analysis shows a need to cut oil supply next year by around 1 million bpd from October levels to avoid an unwelcome build-up of unused crude.
The Organisation of the Petroleum Exporting Countries and the International Energy Agency release their respective monthly reports on the outlook for oil supply and demand later this week.
Analysts said OPEC and the IEA are releasing their updates to the oil market this week and the outlook for 2019 was already on the weak side.
The oil price has fallen by around 20% in the last month.
It has been driven lower by a rapid increase in global supply and the threat of a slowdown in demand, especially from those customers, such as India, Indonesia and China, whose currencies have weakened against the dollar and eroded their purchasing power.
Production from Saudi Arabia, Russia and the US alone has risen by 1.05 million bpd in the last three months, based on official output figures.
This has left OPEC scrambling to adjust its own output, which, at around 33.3 million bpd, accounts for roughly a third of total global daily supply.
An official from group member Kuwait said today that major oil exporters over the weekend had "discussed a proposal for some kind of cut in (crude) supply next year", although the official did not provide any detail.