On Sunday, OPEC+ is anticipated to consider cutting crude oil production by over a million barrels a day at its upcoming meeting next week.
On October 05, the Organization of Petroleum Exporting Countries and allies will meet in person in Vienna for the first time since March 2020, when the Covid-19 outbreak broke out.
The cartel’s expected output cut would be the largest move yet since the coronavirus pandemic started.
The planned move is aimed to address oil market weakness against the backdrop of plummeting crude prices and months of severe market volatility, which prompted top OPEC+ producer Saudi Arabia to announce the cut.
The organization has refused to increase production to lower oil prices despite pressure from major consumers, which includes the United States, to help economies worldwide.
Last week, Russia said that it would like to see OPEC+ slashing one million barrels per day, which is 1.00% of global supply.
Yet, there were market speculations that the production cut would exceed one million barrels a day since it would include voluntary additional slashes from Saudi Arabia.
Crude oil prices rise ahead of OPEC+ meeting
At the time of writing, the West Texas Intermediate futures were trading higher by 3.12% to $81.97 per barrel, and the Brent contracts were advancing by 2.51% to $87.71 a barrel on October 03 due to the expected output cut by OPEC+.
Also, this move is expected to attract the wrath of the US government and other major importing nations, which have been trying to cool down inflationary pressures.
Meanwhile, the production cut is aimed to cap off crude oil’s fourth consecutive monthly decline in September amid aggressive monetary tightening by major central banks worldwide, which sparked fears about a global economic recession and weaker energy demand.
Besides, the soaring US dollar that makes greenback-priced commodities more expensive for overseas buyers also weighed on crude costs alongside Covid-related curbs in top importer China.
