IN meeting in ViennaOPEC+ agreed to the biggest cut in oil production since the COVID-19 pandemic in 2020, reducing supply in an already battered market despite pressure from the United States and other countries to increase production, Al Jazeera reported. Reuters.
A decision by the global oil cartel on Wednesday could trigger a recovery in oil prices, which have fallen to about $90 from $120 three months ago on fears of a global economic recession, rising U.S. interest rates and a stronger dollar.
Some analysts have suggested that the US may try to release some of its oil reserves to try to counter OPEC+ efforts.
The United States has been pressing OPEC not to cut production, saying it is not supporting itself, a source familiar with the matter told Reuters.
The sources said it remained unclear whether the cuts could include additional voluntary cuts from members such as Saudi Arabia, or whether they could include the group’s existing underproduction.
In August, OPEC+ output was about 3.6 million barrels per day below target.
“High oil prices, if driven by significant production cuts, are likely to irritate the Biden administration ahead of the US midterm elections,” analysts at Citi, a major global bank, said in a note.
At the same time, forecasts regarding the growth of the world economy, and therefore oil consumption, continue to be marked by uncertainty. In addition, there are problems on the other side of the chain, namely supply.
OPEC+ cannot meet current production quotas, and of the group’s 23 countries, only Saudi Arabia and the United Arab Emirates have the capacity to increase production more.
Johannes Raubal of energy analyst agency Kpler estimated in a statement to EFE that OPEC+ produced 4.1 million barrels less in September than planned for the month.
In this context, a number of analysts believe that the decision of the G7, which unites the richest countries, to introduce a ceiling on the price of Russian oil, as well as the plans of the European Union to do the same, have influenced the strengthening of the alliance between OPEC. and Russia.
Source: Hot News RO
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