OPEC+ Decides on Slight Cut in Production
The alliance of oil exporting countries cuts production. Saudi Arabia and Russia are sending a clear signal to the West. With the cutback, the hopes of oil importers in Europe that they would at least be relieved of the burden of crude oil in the face of rapidly rising gas prices are fading.
The major oil nations of the OPEC+ alliance are slightly lowering their production target / Picture: © Wikimedia Commons / DALIBRI / CC BY-SA (https://creativecommons.org/licenses/by-sa/3.0)
The major oil nations of the OPEC+ alliance are again slightly lowering their production target after increases in recent months. The joint daily production for October will be reduced by 100,000 barrels (159 liters each), it was said after the OPEC+ online meeting of oil ministers from about 20 countries. This reverses the recent production expansion by OPEC+, which is dominated by Saudi Arabia and Russia.
It was pointed out at the OPEC and non-OPEC Ministerial Meeting that volatility and a decline in liquidity have adverse effects on the current oil market and that stability and efficiency need to be supported. In response to higher volatility and increased uncertainty, the Meeting emphasized the importance of continuously assessing the market conditions and adjusting production as necessary.
With their decision, the 23 Opec plus energy ministers are making it clear that they oppose a drop in oil prices well below $90. The Oil countries pointed to falling oil prices due to fears of a global recession. As Handelsblatt reports, Helima Croft, Opec expert at bank RBC Capital Markets, said, "It can't be ruled out that the Opec group will try to draw a price ceiling down."
Oil prices rose in light of the supply cut that was in the air and finally agreed to. The European reference price, Brent oil, was quoted at around 93 dollars per barrel on Monday afternoon. That was 3.62 dollars more than on Friday. The U.S. variety West Texas Intermediate (WTI) increased by 3.12 dollars to 89.99 dollars.