As Opec+ meeting looms, expectations heighten over big output cuts

EXPECTATIONS are high that the Organization of the Petroleum Exporting Countries and allies (Opec+) are set to slash oil output at Wednesday’s (Oct 5) meeting, given the oil cartel’s “desire for price support” as evinced from its symbolic cut at last month’s powwow.

“In all likelihood, the Opec+ is set for a cut, if not a series of cuts, in production. Clearly, the desire for price support has been evident in the talks of “imbalance” in spot and futures markets, which has been a thinly veiled protestation of sharp price declines.,” said Mizuho Bank’s Asia & Oceania Treasury economics and strategy head Vishnu Varathan.

Priyanka Sachdeva, a market research analyst at Phillip Nova said: “Despite the ongoing crisis in Ukraine and supply chain disruptions, Opec+ has always worked towards supporting higher prices on anticipation of demand drop as concerns for economic downtrend are escalating”.