The Saudis said they would decrease the oil supply by as much as 500,000 bpd as soon as in December - albeit other OPEC member-states and their allies, such as Russian Federation, have yet to announce their position on the proposed cuts.
Worldwide benchmark Brent crude oil futures were at $69.47 a barrel, down 65c, or 0.9%, from their last close.
Brent crude dropped below $70 a barrel on Friday for the first time since April, while the New York's West Texas Intermediate sank below $60 a barrel, a nine-month low.
OPEC and allied oil-producing countries will likely need to cut crude supplies, perhaps by as much as 1 million barrels of oil a day, to rebalance the market after US sanctions on Iran failed to cut Tehran's output, Saudi Arabia's energy minister said Monday.
Oil prices are staging a comeback, driving Brent crude oil above $70 following an announcement from the kingdom of Saudi Arabia indicating that the world's major crude producers plan to cut supply significantly in 2019.
Crude oil futures have spiked in early trade on Monday, finding support on reports that Saudi Arabia will cut production levels in December.
US President Donald Trump, however, did not like the rhetoric coming from his political ally in Saudi Arabia, and tweeted about it.
Additionally, the United States has commissioned 12 new oil derricks earlier this month, with the total rig count reaching 886 - the highest number since March 2015. The market should be balanced by the middle of next year, though there are forecasts for a surplus of 1 million to 1.4 million barrels a day, he said.
That means US producers have ramped up output even though many of them have been getting less than $60 per barrel for most of the year, far below the global market price of oil.
This time, Saudi Arabia is urging allies to focus on the risk of rising oil inventories and forecasts for massive growth in rival supplies next year including USA shale.
The proposed reduction is from October production levels, Falih said. Speculation is rife that other Organisation of the Petroleum Exporting Countries, or OPEC, may announce similar cuts. Saudi Arabia is the de facto leader of the group. OPEC and allied oil-producing countries likely need to cut crude supplies to rebalance the market after proposed US sanctions on Iran failed to cut Tehran's ouput, top Saudi and Emirati energy officials said Monday.
Prices have been hurt by rising USA oil inventories and fear that trade wars could contribute to slower economic growth, which would reduce demand for energy.
However, market participants say the global energy market could see another period of excessive supply of crude oil as soon as next year - with oil bulls looking at Bakken anxiously. That was just before crude prices collapsed and Islamic State militants seized much of the nation, stifling the planned increase.
UAE energy minister Suhail Al Mazrouei, who is also OPEC president, said the cartel wouldn't allow the market to become oversupplied.
"Ideally, we don't like to cut", Al-Falih said.
Government-owned Abu Dhabi National Oil wants to raise capacity to 4 million barrels a day by the end of 2020 and 5 million by 2030, aided by a recently approved five-year, $132 billion budget.