It is reported that producers of the OPEC+ alliance (OPEC+alliance) have discussed possible production cuts next week and agreed to cut production by 500,000 to 1 million barrels per day. A source inside OPEC said the group "probably" would agree to cut some sources, and Russia is reportedly pushing for a cut of 1 million barrels per day.
Although the production cuts themselves have limited fundamental impact on the oil market due to insufficient OPEC+ production, this will indicate that the group intends to push up oil prices.
OPEC+ Alliance producers are discussing the possibility of a production cut deal next week, and they have narrowed their options to 500,000 barrels to 1 million barrels a day, OPEC sources told Reuters on Friday.
OPEC+ Major oil-producing countries have begun discussions that could cut their collective oil production quotas to support the market, which has been dragged down in recent weeks due to concerns about a recession. "Maybe on weekends or Monday, things will be clearer. Usually, the consultations end before the meeting date," a source in OPEC told Reuters today.
On Wednesday, OPEC+ held a meeting to discuss the market and fundamentals as oil prices have fallen below $90 a barrel, the last level before Russia invaded Ukraine.
A source from the Organization of Petroleum Exporting Countries told Reuters that the organization "probably" would agree to cut oil production.
At the last meeting, OPEC+ reversed September's daily growth of 100,000 barrels and returned October's quota to August's levels.
Although the slight adjustment of the group's collective goals is insignificant to the balance of the oil market, OPEC+ said it is ready to intervene in the market at any time. The meeting in early September decided to "please consider convening OPEC and non-OPEC ministerial meetings at any time when necessary to discuss market development issues."
Earlier this week, Reuters sources familiar with Russia's ideas said that Russia may propose OPEC to cut 1 million barrels per day from the organization's total production at the next OPEC+ meeting.
Even if the production cut target is lower, the actual production cut may be much smaller given that many OPEC+ member states, including Russia, are far below their respective targets.
However, a significant reduction in collective quotas will send a signal to the market that the OPEC+ alliance is closely following the trend of oil prices, although it always says it is not targeting specific oil prices.
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