Speculation is rife that Saudi Arabia is about to surprise oil markets when the Organization of Petroleum-Exporting Countries (OPEC) meets on Friday by finally deciding to cooperate with other global oil producers on cutting production.
OPEC is due to meet in Vienna on Friday in a highly-anticipated meeting of the 12-member oil producing group. Saudi Arabia is seen as the main swing producer and de facto leader of the group as it is able to increase or decrease supply at minimal cost, and has spare production capacity.
On Thursday, crude prices edged up on a report suggesting that Saudi Arabia will propose a deal to balance the oil market. Analysis firm Energy Intelligence said the country could propose a cut of 1 million barrels per day (bpd) in OPEC output, citing a senior OPEC delegate. A Saudi oil source told Reuters on Thursday that media reports of a Saudi OPEC output cut proposal were "baseless". "It is baseless," the source, who asked not to be named, said without elaborating.