Opec+ to consider output cut of over 1 million barrels per day

Bloomberg

The Opec+ group of oil producers will consider cutting output by more than 1 million barrels a day when it meets in Vienna on Wednesday, according to delegates.
A larger-than-expected reduction would reflect the scale of concern that the global economy is slowing fast in the face of rapidly tightening monetary policy. A stronger dollar has also weighed on prices. A final decision on the size of the cuts won’t be made until ministers meet, the delegates said.
Brent crude soared above $125 a barrel following Russia’s invasion of Ukraine in February. It’s since dropped to $85 as central banks raise interest rates to fight inflation and economies from the US to China slow.
The 23-nation alliance is scheduled to meet on Wednesday at its headquarters in Vienna, Opec’s secretariat said a statement. The group has been meeting on-line on a monthly basis and wasn’t expected to arrange an in-person gathering until at least the end of this year.
Banks including JPMorgan Chase & Co. said Opec+ may need to lower output by least 500,000 barrels a day to stabilize prices. Helima Croft, chief commodities strategist at RBC Capital Markets LLC, has said the group may opt for a cut twice that large.
“I suspect that they might not want to go in person for a minor move,” Croft said.
The 13-nation Organisation of Petroleum Exporting Countries entered into a partnership with 10 other major producers in 2016, including Russia. Saudi Arabia is keen to preserve that relationship, which it sees as crucial to stabilising oil markets, despite pressure from the US and Europe for Russia to be isolated because of its invasion.
Opec+ underscored its readiness to steady the market with a symbolic reduction at a previous meeting on September 5. Saudi Energy Minister Prince Abdulaziz bin Salman promised the same day to remain “preemptive and pro-active” in addressing extreme price volatility.