OPEC+ Considers Cutting Oil Production by Over 1 mmbbl/d

OPEC+ Considers Cutting Oil Production by Over 1 mmbbl/d

According to OPEC sources, OPEC+ may consider reducing oil production by more than 1 million barrels per day the following week in order to address the weakness in oil market. This would be the largest action taken since the COVID-19 crisis, Reuters reported.

The Oct. 5 meeting will take place amid a backdrop of declining oil prices and months of intense market volatility, which led Saudi Arabia, the leading producer in OPEC+, to suggest that the group may reduce production.

Despite pressure from significant consumers, such as the United States, to support the global economy, OPEC+ has declined to increase supply in order to cut oil prices.

However, due to worries about the global economy and a surge in the dollar after the Federal Reserve hiked interest rates, prices have decreased significantly in the past month.

Saudi Arabia hasn’t condemned Moscow’s activities despite having tense relations with the administration of U.S. President Joe Biden.

According to a person familiar with Russian thinking, Moscow would like to see OPEC+ drop 1 million bpd, or 1%, of the world’s supply last week.
That would be the biggest cut since 2020 when OPEC+ reduced output by a record 10 million bpd as demand crashed due to the COVID pandemic. The group spent the next two years unwinding those record cuts.

Saudi Arabia has not condemned Moscow’s actions amid difficult relations with the administration of U.S. President Joe Biden.

According to a person familiar with Russian thinking, Moscow would like to see OPEC+ drop 1 million bpd, or 1%, of the world’s supply last week.

That would mark the largest reduction in production since OPEC+ slashed supply by a record 10 million bpd in 2020 as demand fell as a result of the COVID outbreak. The group worked on these record cuts over the following two years.

 

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