The organization cancels the production increase agreed in August due to fears that an economic slowdown will reduce demand and cause “petro-prices” to fall
The OPEC+ alliance, led by Saudi Arabia and Russia, agreed on Monday to reduce the official oil supply of this group of 23 countries by 100,000 barrels per day from October 1, fearing that a slowdown in the world economy will reduce demand. of “black gold”.
With this decision, sanctioned by the ministers of the OPEC+ sector in their monthly teleconference, the increase in pumping that had been adopted in the previous meeting, on August 3, for the month of September, was annulled.
The ministers agreed to “return to the production level of August 2022”, recalling that “the upward adjustment of 0.1 million barrels per day (mbd) was planned only for September”, reported the Organization of Petroleum Exporting Countries (OPEC). ) it’s a statement.
They also asked, in their final declaration, to consider the possibility of convening a new ministerial meeting of OPEC + “at any time to address the evolution of the market, if necessary”, which could take place before the next regular meeting. and monthly, convened for October 5.
In their final statement, they highlighted that the decision was made after reviewing “the current fundamentals of the oil market” and verifying the “consensus on its perspectives”, although without specifying what these would be.
However, the proposal of the possibility of a new meeting at any time, instead of calling the next regular meeting, as they have usually done until now, reveals a certain insecurity and uncertainty regarding the evolution of the oil market in the short term.
The withdrawal of the increase in supplies promised a month ago, after a historic trip by the president of the United States, Joe Biden, to Saudi Arabia to ask OPEC to open the taps – in order to make crude cheaper and reduce inflation -, It comes at a time of high tension in the energy markets.
Especially difficult is the situation facing Europe after Moscow decided on Friday to suspend indefinitely the supply of gas through Nord Stream 1 and threatened to cut off all sales of oil and oil products to the European Union (EU) if the powers of the G7 impose a ceiling on the price of Russian crude.
In its brief final note, OPEC + does not explain the reasons for its decision, but everything would indicate that it fears that a slowdown in the economy will cause a drop in oil demand and “petroprices”.
This factor had been putting downward pressure on the price of a barrel, which had lost more than 20% since the peaks of 120 dollars that it reached in June.
But the expectation that OPEC+ would reduce its output, as it eventually did, reversed the trend.
Ahead of the result of the teleconference, Brent oil advanced 2.3%, to 95.2 dollars a barrel.
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