Producers of the OPEC+ alliance that are discussing the possibility of agreeing next week on an oil production cut have narrowed the range of options to between 500,000 barrels per day (bpd) and 1 million bpd, sources at OPEC+ told Reuters on Friday.
Major OPEC+ producers have already initiated discussions on a potential cut in their collective oil production quota to support the market, which has been dragged down by fears of a recession in recent weeks.
"Maybe during the weekend or Monday it will be more clear. Usually, the consultations conclude just before the meeting date," one source at OPEC+ told Reuters today.
OPEC+ meets on Wednesday, October 5, to discuss the market and fundamentals situation as oil prices have fallen below $90 per barrel, a level last seen just before the Russian invasion of Ukraine.
It is "likely" that the group will agree on a cut, a source at OPEC told Reuters.
At the previous meeting, OPEC+ reversed the 100,000-barrels-per-day increase for September and returned the October quota to the levels from August.
While the slight tweak in the group's collective target was negligible for oil market balances, OPEC+ signaled readiness to intervene in the market at any time. The meeting in early September decided to "Request the Chairman to consider calling for an OPEC and non-OPEC Ministerial Meeting anytime to address market developments, if necessary."
Earlier this week, Reuters sources familiar with Russian thinking said that Russia was likely to propose at the next OPEC+ meeting that the group cut 1 million bpd from the group's collective output.
Even if the production cut target is lowered, the actual production cut could be much smaller, considering that many OPEC+ members, including Russia, are pumping well below their respective targets.
Nevertheless, a substantial reduction in the collective quota would be a signal to the market that the OPEC+ alliance is closely watching the price movements, although it always says it doesn't target a specific price of oil.
By Tsvetana Paraskova for Oilprice.com
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