Opec+ will consider output cut of more than 1 million barrels

The Organization of the Petroleum Exporting Countries and its allies (Opec+) will consider cutting output by more than 1 million barrels a day when it meets in Vienna on Wednesday (Oct 5), said 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 US dollar has also weighed on prices.

A final decision on the size of the cuts will not be made until ministers meet, the delegates said.

Brent crude soared above US$125 a barrel following Russia’s invasion of Ukraine in February. It has since dropped to US$85, tempering the spectacular windfall enjoyed by the Saudi Arabia, Russia, the United Arab Emirates and other members of the coalition.

The 23-nation alliance is scheduled to meet on Wednesday at its headquarters in Vienna, Opec’s secretariat said in a statement on Saturday.

The group has been meeting online on a monthly basis and was not expected to arrange an in-person gathering until at least the end of this year.

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Banks including JPMorgan Chase & Co said Opec+ may need to lower output by least 500,000 barrels a day to stabilise prices. Helima Croft, chief commodities strategist at RBC Capital Markets, 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. BLOOMBERG