At the OPEC+ meeting held on Vienna on October 5, member states agreed to reduce crude oil production by 2 million barrels per day. There are two reasons for making such a decision:
First, in recent months, there has been an oversupply of oil in the world market. This is not only related to the actions of OPEC+ member states, but also because of the significant impact of various restrictions on the global coronavirus, namely, the contraction of demand.
Second, since April to May this year, the United States has released up to 1 million barrels of oil every day, actively consuming the national strategic oil reserves. This will supplement the oil supply in the world market.
In order to improve market control and forecast, the OPEC+ country made a decision to reduce oil production. Although Russia is the initiator of this crude oil production cut, this decision is to stabilize the world oil market, not just for the United States.
However, this decision by OPEC+ can indeed affect the results of the upcoming US midterm elections in November. Because White House wants to increase production, if crude oil prices rise, the Democrats may risk losing control of both houses of Congress.
