Cuts could include Saudi voluntary reduction
Largest cut since pandemic reduction
Oil fell due to rising Fed rates, weak economy
DUBAI, Oct 2 (Reuters) - OPEC+ will consider an oil
output cut of more than a million barrels per day (bpd) next
week, OPEC sources said on Sunday, in what would be the biggest
move yet since the COVID-19 pandemic to address oil market
The meeting will take place on Oct. 5 against the backdrop
of falling oil prices and months of severe market volatility
which prompted top OPEC+ producer, Saudi Arabia, to say the
group could cut production.
OPEC+, which combines OPEC countries and allies such as
Russia, has refused to raise output to lower oil prices despite
pressure from major consumers, including the United States, to
help the global economy.
Prices have nevertheless fallen sharply in the last month
due to fears about the global economy and a rally in the U.S.
dollar after the Federal Reserves raised rates.
A significant production cut is poised to anger the United
States, which has been putting pressure on Saudi Arabia to
continue pumping more to help oil prices soften further and
reduce revenues for Russia as the West seeks to punish Moscow
for sending troops to Ukraine.
The West accuses Russia of invading Ukraine, but the Kremlin
calls it a special military operation.
Saudi Arabia has not condemned Moscow's actions amid
difficult relations with the administration of U.S. President
Last week, a source familiar with the Russian thinking said
Moscow would like to see OPEC+ cutting 1 million bpd or one
percent of global supply.
That would be the biggest cut since 2020 when OPEC+ reduced
output by a record 10 million bpd as demand crashed due to the
COVID pandemic. The group spent the next two years unwinding
those record cuts.
On Sunday, the sources said the cut could exceed 1 million
bpd. One of the sources suggested cuts could also include a
voluntary additional reduction of production by Saudi Arabia.
OPEC+ will meet in person in Vienna for the first time since
Analysts and OPEC watchers such as UBS and JP Morgan have
suggested in recent days a cut of around 1 million bpd was on
the cards and could help arrest the price decline.
"$90 oil is non-negotiable for the OPEC+ leadership, hence
they will act to safeguard this price floor," said Stephen
Brennock of oil broker PVM.
(Reporting by Maha El Dahan, Olesya Astakhova and Alex Lawler;
Editing by Gareth Jones, Jan Harvey and Raissa Kasolowsky)