Several major producers of the OPEC+ alliance have started talks about a potential oil production cut ahead of the regular monthly OPEC+ meeting on October 5, OPEC and OPEC+ sources told Reuters on Thursday.
OPEC+ meets next Wednesday to discuss the market and fundamentals situation as oil prices have fallen below $90 per barrel, a level last seen just before the Russian invasion of Ukraine.
It is “likely” that the group will agree on a cut, a source at OPEC told Reuters.
OPEC+ is set to consider Wednesday its sharpest production cut since the start of the pandemic to help prop up falling oil prices, a move that could put pressure on global economic growth.
The Organization of the Petroleum Exporting Countries and its Moscow-led allies, collectively known as OPEC+, are weighing a reduction of more than 1 million barrels a day, delegates in the group said.
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This is OPEC’s expected reaction to a pending recession. The question is will their reaction be appropriate and measured or will it be extreme.
OPEC has its own expert economists. A measured reaction is likely. Damaging the world economy is not in their best interest. After the Asian meltdown in the '90s, they cut oil prices to help the recovery.
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OPEC Fights the Fed, Crude Jumps 3 Percent on Expected Output Cuts
Oil Jumps On Production Cuts
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WTI for November delivery rose 3.2% to $82.03 a barrel on the New York Mercantile Exchange at 6:50 a.m. in Singapore. Futures tumbled 25% in the last quarter.
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Brent for December settlement gained 3.2% to $87.89 a barrel on the ICE Futures Europe exchange.