OPEC+ will reportedly discuss an oil output cut of over one million barrels per day (bpd) in what would be the largest move since the pandemic to try and correct market weakness.
A meeting will take place on Wednesday 5 October to address falling oil prices and several months of significant market volatility that prompted Saudi Arabia to say production may be slashed.
OPEC+, which combines the 13 members of the organisation of petroleum exporting countries (OPEC) and 11 other non-OPEC members including Russia, has been refusing to increase output to reduce oil prices despite pressure to help the global economy.
″US$90 oil is non-negotiable for the OPEC+ leadership, hence they will act to safeguard this price floor,” Stephen Brennock, oil broker PVM, commented.
Prices have been falling though, without intervention from OPEC+, amid concerns surrounding the wellbeing of the global economy and a rally in the value of the US dollar.
CNBC on Sunday cited sources as saying the cut is expected to be more than one million bpd and may include a voluntary extra reduction by Saudi Arabia.
This drop would be equivalent to approximately 1% of the global oil supply and the largest cut since the Covid-19 pandemic emerged in 2020, when output was slashed by a record 10mln bpd as demand sank.
A production cut would likely annoy the US, which has been the biggest advocate of pumping more oil to drag prices down and further reduce Russia’s revenues as the West continues to punish Moscow for invading Ukraine.
Saudi Arabia is still yet to condemn Russia’s actions amid difficult relations with the US administration.