(Opener.com ) According to the Financial Times and Reuters on October 2, OPEC and some non-OPEC oil producers will consider cutting oil production by more than 1 million barrels at the Vienna meeting on Wednesday (May 5). Affected by this, oil prices in Asia jumped more than 3% in the early trading session on the 3rd.
Screenshot of the Financial Times report
report quoted people familiar with the matter as saying that the 1 million yuan/day production cut will be the largest since the epidemic, accounting for more than 1% of the global supply. In 2020, OPEC+ cut production by a record 10 million barrels per day due to the coronavirus pandemic.
According to reports, the exceeding expectations of production cuts reflects the rapid tightening of monetary policy, highlighting "OPEC+" concerns about a rapid cooling of the global economy.
At the same time, the move could push up oil prices and spark dissatisfaction in the United States as countries work to lower energy costs. U.S. President Biden has been trying to lower fuel prices for motorists before the midterm elections next month.
However, two people who know Saudi Arabia's ideas revealed that the country hopes to cut production, on the one hand to support oil prices and on the other hand to retain some production capacity. Saudi Arabia is concerned that Russian production could drop sharply later this year if Western countries tighten sanctions on Russian crude oil.
On February 11, 2019, in Midland, Texas, USA, the pump jack is pumping crude oil. Source: Reuters (same below)
reported that "OPEC+" announced last weekend that it would change its monthly meeting, which has been held online since the early stages of the epidemic, to a comprehensive meeting held at the organization's headquarters in , Vienna, , which may indicate that the meeting will discuss major policy changes.
People close to talks said that the total production cuts of "OPEC+" may be between 500,000 barrels per day to 1 million barrels per day, but Saudi Arabia may further reduce its own production on this basis.
includes JPMorgan Chase and other investment banks predict that the organization said that "OPEC+" may need to cut production by at least 500,000 barrels per day to stabilize oil prices, and RBC chief economic analyst believes that "OPEC+"'s production cut may be twice as high as speculation.
Saudi Arabia has increased its production cuts to support the oil market
Since June, oil prices have fallen for four consecutive months. However, affected by the expectation of "OPEC+" to increase production cuts, in the early Asian session on the 3rd, Berry Oil and WTI crude oil both jumped more than 3%, at US$87.65 per barrel and US$81.88 per barrel, respectively.
However, the organization will not make a final decision on the scale of production cuts until the ministerial meeting is held. If a decision is made, it will be the second straight month of production cuts the organization after 100,000 barrels per day cuts last month.
At the previous September meeting, "OPEC+" said that it would cut production by about 100,000 barrels per day due to concerns about the global economy falling into recession and worry that once the Iranian nuclear agreement restarts, more 100,000 barrels will flow into the market.
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