Oct 5, 2022
VOT Research Desk
Key News – Insights and Analysis
Some delegates told the media on Tuesday that OPEC+ may be considering a cut of up to 2 Million Bpd.
OPEC+ is evaluating the state of the oil markets and the current state of oil prices, which began to fall in June near levels that some OPEC+ members may find unacceptable as it prepares to meet on Wednesday to discuss its plans for oil production for November.
The OPEC+ group believes that the markets are largely ignoring market fundamentals, despite the growing concern about a severe global recession and its impact on oil demand. Despite this, OPEC+ is reportedly considering a significant reduction in production—an even larger reduction than what was previously thought to be possible
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To begin with, a rumor was that Russia was trying to get OPEC+ to cut production by 1 million barrels per day. Later on, it was said that the group was thinking about cutting production by between 500,000 and 1 million bpd. Another source stated shortly thereafter that OPEC+ was contemplating an even larger cut of over 1 million bpd
According to the most recent information provided by OPEC+ participants, the group is considering yet another option: a cut of 2 million bpd.
The available additional capacity of OPEC+—without which the group would be unable to control the market in the future—is an additional factor in determining the group’s production plans for November in addition to the current prices of oil.
Shortly after the United States ends its one million barrels per day release of crude oil from its emergency stockpiles, an output cut of that magnitude would occur.
Due to the possibility of such a reduction in output, crude oil prices have increased over the past few days, with Brent now trading over $91/bbl.
