Abu Dhabi: Oil producing countries are expected to cut production by at least 1 million barrels a day to rebalance oil markets at the crucial Vienna summit on Thursday, analysts told Gulf News.

The meeting takes place as oil prices slide due to record production from Saudi Arabia, Russia and other countries and concerns pertaining to global economic growth.

“I expect Opec members plus Russia to agree this Thursday on total crude oil production cut of 1 million barrels a day (mbd) from the November 2018 levels. Such an agreement could be effective in early 2019,” Garbis Iradian, Chief Economist for Mena at the Washington based Institute of International Finance (IIF), told Gulf News.

Saudi Arabia could cut by 0.5 mbd, Russia by about 0.15 million barrels a day and the UAE by 0.15 million barrels a day, he said adding that other countries like Kuwait and Iraq could also cut production to support oil prices.

“The agreement would lead to a modest increase in Brent oil prices to the range of $65 to 70 per barrel. We at the IIF are still working with an average Brent oil price of $67 per barrel for 2019,” he said.

Iradian also said that Brent oil prices between $65 to $70 per barrel could be acceptable to Saudi Arabia, Russia and the United States.

Saudi Arabia’s fiscal breakeven price of oil that would balance its 2019 budget is about $80 per barrel and with an average oil price of $67 per barrel the fiscal deficit would be around 5 per cent in 2019.

“Such a deficit is manageable and could be easily financed from tapping the international market and issuing domestic bonds given the kingdom’s relatively low public debt of around 20 per cent of GDP and still large foreign assets.”

On the other hand, Russia’s fiscal breakeven oil price that would balance the federal budget for 2019 is $58 per barrel and with an average oil price of $67 per barrel Russia would register a fiscal surplus of 1.8 per cent of GDP, he added.

In similar comments, Ehsan Khoman, Head of Mena Research and Strategy at MUFG Bank Ltd said Opec and its allies are likely to favour supporting prices over market share and will collectively act by cutting production between 1 million barrels a day to 1.4 mbd.

He, however, said US President Donald Trump’s stance on lower oil prices will be a significant obstacle for any production cuts agreement at Vienna.

International benchmark, Brent was trading slightly above $62 per barrel on Wednesday with US crude West Texas Intermediate at about $53 per barrel.