OPEC+ considers oil cut of more than 1 million barrels per day

DUBAI, Oct. 2 (Reuters) – OPEC+ will consider cutting oil production by more than a million barrels per day (bpd) next week, OPEC sources said Sunday, in what would be the biggest move yet since the COVID-19 crisis. 19 pandemic to address weakness in the oil market.

The meeting will take place on October 5 against a backdrop of falling oil prices and months of severe market volatility that led top OPEC+ producer, Saudi Arabia, to say the group could cut production.

OPEC+, which unites OPEC countries and allies such as Russia, has refused to increase production to lower oil prices, despite pressure from major consumers, including the United States, to help the global economy.

Nevertheless, prices have fallen sharply in the past month on fears about the global economy and a rally in the US dollar after the Federal Reserves raised interest rates.

A significant cut in production is about to infuriate the United States, which has pressured Saudi Arabia to keep pumping more to further lower oil prices and cut revenue for Russia, while the West wants to punish Moscow for sending of troops to Ukraine.

The West accuses Russia of invading Ukraine, but the Kremlin calls it a special military operation.

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

Last week, a source familiar with Russian thinking said Moscow would like to see OPEC+ cut 1 million barrels per day or one percent of global supply.

That 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 winding down those record cuts.

On Sunday, sources said the cut could exceed 1 million bps. One of the sources who suggested austerity could also be a voluntary additional cut in production by Saudi Arabia.

OPEC+ will meet in person in Vienna for the first time since March 2020.

Analysts and OPEC watchers such as UBS and JP Morgan have suggested in recent days that a cut of around 1 million bpd was at stake and could help counter the price decline.

“$90 oil is non-negotiable for the OPEC+ leadership, so they will act to protect this price floor,” said Stephen Brennock of oil broker PVM.

Reporting by Maha El Dahan, Olesya Astakhova and Alex Lawler; Editing by Gareth Jones, Jan Harvey and Raissa Kasolowsky

Our Standards: The Thomson Reuters Trust Principles.