The OPEC+ meeting on Monday endorsed a decision to cut the collective oil production target by 100,000 barrels per day (bpd) for October, despite Russia reportedly resisting such a move.
In another super-short meeting today, the energy ministers of the OPEC+ production pact agreed to return the targeted production levels to the August quotas, saying that last month’s increase was intended only for September.
Ahead of the meeting, the Wall Street Journal reported, citing unnamed sources close to the cartel, that Russia would not support a decision by OPEC+ to cut oil production.
While several OPEC members have signaled support for such a move, including Saudi Arabia, Russia is not among them, according to the sources. The reason, they said, was that a supply cut might diminish its sway over large Asian oil buyers as it would be a signal there is more oil in the world than there is demand for. According to the Wall Street Journal sources, Russia voiced its objections to a production cut last week at a preliminary meeting, where OPEC+ set as its baseline scenario an oil market supply surplus of 900,000 bpd for this year and next.
The Joint Ministerial Monitoring Committee (JMMC) of the OPEC+ oil producer group had supported during an earlier meeting the 100,000-bpd cut.
The small cut is actually quite irrelevant considering that OPEC+ is estimated to be some 2.9 million bpd behind collective quotas.
OPEC+, however, decided that it could call a meeting at any time to discuss other actions. The meeting, OPEC said, decided to “Request the Chairman to consider calling for an OPEC and non-OPEC Ministerial Meeting anytime to address market developments, if necessary.”
OPEC’s next regular monthly meeting is scheduled for October 5.
Following the OPEC+ meeting today, oil prices jumped by more than 3% in early trade ET, with WTI Crude hitting the $90 per barrel mark, as of 8:33 a.m. ET, and Brent Crude up by 3.5% at $96.64.
By Tsvetana Paraskova for Oilprice.com
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