OPEC sources told Archyde.com on Sunday that The “OPEC +” bloc He will consider cutting oil production by more than 1 million barrels per day when it meets this week, in what may be the largest move so far since the outbreak of the Covid-19 pandemic to address weakness in oil markets.
The meeting is scheduled to take place on the fifth of October, against the background of the landing oil prices And severe market fluctuations for months, prompting Saudi Arabia, the largest producer in “OPEC +”, to say that the organization may reduce production. OPEC+, which includes members of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC allies including Russia, has refrained from increasing production to lower oil prices despite pressure from major consumers, including the United States, to support the global economy.
However, prices fell sharply during the last month due to concerns about the global economy and the appreciation of the US dollar after the Federal Reserve (US Central Bank) raised interest rates.
This would be the biggest cut since 2020, when OPEC+ cut production by a record 10 million barrels per day as demand collapsed due to the Covid pandemic. The group spent the next two years canceling those record cuts. On Sunday, the sources said the cut could exceed 1 million barrels per day.
One of the sources suggested that the cuts also include a voluntary additional cut in Saudi production. Vienna is hosting the first meeting since March 2020 in the personal presence of the OPEC + bloc.
Analysts and OPEC observers, such as UBS and JP Morgan banks, have expected during the past days that the discussion will now focus on a reduction of about one million barrels per day, which may help stop the decline in prices.
“The $90 oil (price) is non-negotiable for the OPEC+ leadership, so they will work to protect … this price,” said Stephen Brennock of BVM oil brokerage.
(Archyde.com)