Oil prices rise as Opec+ panel recommends 2mn barrel cut
Gas prices are displayed at a gas station in Frankfurt, Germany, Wednesday, October 5, 2022.
photo: AP /Michael Probst
An Opec+ panel has recommended the group reduce oil production by 2mn barrels a day, according to a delegate close to the meeting, Financial Times reported.
A panel of OPEC ministers recommended a 2 million reduction in daily production from current quotas. That would put OPEC in conflict with the US government after President Joe Biden pushed for higher oil production amid concerns over rising US gasoline prices before congressional elections scheduled for November.
On a historic trip to Saudi Arabia, US President Joe Biden could not convince the Saudi monarchs to increase production and reduce prices. Following his visit, oil prices have only increased.
According to the Financial Times, if agreed to, a cut of that size would probably boost oil prices but risk angering the US and other western countries already battling an energy crisis and the risk of recession.
According to multiple sources close to the discussions, Saudi Arabia has aligned with Russia in supporting a large supply cut after oil prices slipped over the last quarter to around $90 a barrel from $120 in early June, the UK-based paper reported.
Weak oil prices are one of the main reasons driving the push for a 2-million-barrel daily production. It has been caused by a darkening economic outlook, depressing demand for crude oil and bringing down the prices.
European countries desperately need alternative energy sources following the war in Ukraine. Russia has used its energy as a counterattack to western sanctions on Moscow that have made the lives of ordinary Russians more challenging and increased pressure on Putin.