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Friday, Oct 07, 2022

OPEC+ reverts to August quotas production levels

OPEC+ reverts to August quotas production levels

OPEC and its allies led by Russia on Monday agreed a small oil production cut to bolster prices that have slid on fears of an economic slowdown.
The oil producers will reduce output by 100,000 barrels per day (bpd), amounting to only 0.1% of global demand, for October and also agreed they could meet any time to adjust production before the next scheduled meeting on Oct. 5.

The decision essentially maintains the status quo as OPEC has been observing wild fluctuations in oil prices.

The meeting also agreed to request the group’s chairman to consider calling for an OPEC and non-OPEC Ministerial Meeting anytime to address market developments if necessary.

In another super-short meeting Monday, 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.

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.

The 32nd OPEC and non-OPEC ministerial meeting was held via videoconference. The meeting noted the adverse impact of volatility and the decline in liquidity on the current oil market and the need to support the market’s stability and its efficient functioning.

The meeting noted that higher volatility and increased uncertainties require continuous assessment of market conditions and readiness to make immediate adjustment to production in different forms, if needed, and that OPEC+ has the commitment, the flexibility, and the means to deal with these challenges.

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