Oil and Gas

Gulf OPEC producers agree not to cut output: Rpt

Reuters with CNBC
500,000 barrel/day cut won't stop oil's slide: Pro
Yergin: OPEC's next move
OPEC unlikely to cut output ceiling: Delegates
OPEC preview: Saudi's vs. Kuwait
Oil play ahead of OPEC
Will OPEC cut oil production?

OPEC Gulf oil producers have reached a consensus not to cut oil output when OPEC meets on Thursday in Vienna, a Gulf OPEC delegate told Reuters.

Separately, Saudi Arabian Oil Minister Ali al-Naimi confirmed the Gulf states had reached a unified decision, but did not specify what the consensus was. Naimi said he believed the oil market "will stabilize itself eventually," increasing speculation that the Organization of the Petroleum Exporting Countries' largest producer and exporter, would not support an output cut at its Thursday meeting.

"The GCC reached a consensus,'' Naimi told reporters, referring to the Gulf Cooperation Council. "We are very confident that OPEC will have a unified position."

Benchmark Brent futures were down 68 cents at $77.65 a barrel by 1:20 p.m. ET, having hit a low of $77.30 in the session. U.S. crude was down 53 cents at $73.56, having hit a low of $73.30.

Saudi Arabian Oil Minister Ali al-Naimi
Heinz-Peter Bader | Reuters

Other oil minister comments indicated a similar outlook to Naimi.

"The market will fix itself ultimately," United Arab Emirates Oil Minister Suhail bin Mohammed al-Mazroui told Reuters in an interview.

The OPEC meeting will be one of its most crucial in recent years, with oil having tumbled to below $78 a barrel due to the U.S. shale boom and slower economic growth in China and Europe.

Read MoreOil prices lower as market braces for OPEC meeting

Cutting output unilaterally would effectively mean for OPEC, which accounts for a third of global oil output, a further loss of market share to North American shale oil producers.

If OPEC decided against cutting and rolled over existing output levels on Thursday, that would effectively mean a price war that the Saudis and other Gulf producers could withstand due to their large foreign-exchange reserves. Other members, such as Venezuela or Iran, would find it much more difficult.

Iranian Oil Minister Bijan Zangeneh, often among the first to call for cuts, added to expectations the group will not take any dramatic action in Vienna, saying he and Naimi were now "very close" in their positions and that there was "unity" in the group to monitor the market.

Read MoreOPEC needs to 'wake up' to shale revolution

Kuwait's oil minister said Wednesday the OPEC member will have to accept any market price of oil. "We have to live either with $80 or with $60 or with $100," Ali Saleh al-Omair told reporters.

Three OPEC delegates had previously told Reuters that OPEC is unlikely to cut its oil output ceiling at the meeting, citing high supplies from some members and non-OPEC producers.

Early rumblings had indicated that the Saudis would move to push for cuts of up to 1.5 million barrels a day to help re-balance the market and lift prices.

Read MoreConsumer discretionary sector may be messenger about OPEC

"Only a 1.5 million barrel-a-day reduction would help stabilize the price at this stage," Ole Sloth Hansen, head of commodity strategy at Saxo Bank, said earlier to CNBC. "If no action is taken the market will see this as a renewed selling opportunity."

In a recent survey, only 11 out of 30 strategists polled by CNBC said they thought OPEC will decide not to take any action this Thursday.

In October, members of OPEC produced about 30.6 million barrels a day, despite an official quota of 30 million, according to the International Energy Agency.

How tech is moving oil sands industry forward

Price war

Among the members of OPEC, Venezuela and Iraq have called for output cuts.

"The onslaught of North American shale oil has drastically undermined OPEC's position and reduced its market share," said Dr. Gary Ross, chief executive of PIRA Energy Group.

Russia, which produces 10.5 million barrels per day (bpd) or 11 percent of global oil, came to Tuesday's meeting amid hints it might agree to cut output as it suffers from oil's price fall and Western sanctions over Moscow's actions in Ukraine.

Read MoreRussia revs up oil bears ahead of OPEC meeting

But as that meeting with Naimi and officials from Venezuela and non-OPEC member Mexico ended, Russia's most influential oil official, state firm Rosneft's head Igor Sechin, emerged with a surprise message—Russia will not reduce output even if oil falls to $60 per barrel.

Sechin added that he expected low oil prices to do more damage to producing nations with higher costs, in a clear reference to the U.S. shale boom. On Wednesday, Russian Energy Minister Alexander Novak said he expected the country's output to be flat next year.

Many at OPEC were surprised by Sechin's suggestion that Russia—in desperate need of oil prices above $100 per barrel to balance its budget—was ready for a price war.

"Gulf states are less bothered about a price drop compared to other OPEC members," an OPEC source close to Gulf thinking said.

Read MoreUS energy production grows—so will US power

OPEC publications have shown that global supply will exceed demand by more than 1 million barrels per day in the first half of next year.

While the statistics speak in favour of a cut, the build-up to the OPEC meeting has seen one of the most heated debates in years about the next policy step for the group.

"The idea of unleashing a price war against U.S. shale oil seems strange to me. I doubt you can win this battle as most U.S. oil producers are hedging a lot of their output," said a top oil executive visiting Vienna for talks with OPEC ministers.

—CNBC's Everett Rosenfeld, Sri Jegarajah and Stephen Sedgwick also contributed reporting.