OPEC+ cuts

[dan_s]

Last sentence is the key. Putin has more control than Biden.

OPEC+ Discusses Cutting Oil Output at Next Week’s Meeting (2)
2022-09-29 13:55:34.336 GMT


By Salma El Wardany, Grant Smith and Anthony Di Paola
(Bloomberg) -- OPEC+ has begun discussions about lowering
oil output when it meets next week, as a fragile global economy
continues to weigh on crude prices.
The size of any supply reduction is still under
consideration, said delegates, asking not to be identified as
the talks are private. The Organization of Petroleum Exporting
Countries and its allies will meet to decide November output
levels on Oct. 5.
Oil prices have slumped by a fifth since early August as
central banks become more hawkish and coronavirus lockdowns
hinder China’s economy. The losses threaten the spectacular
windfall being enjoyed this year by Saudi Arabia and other major
producers.
Still, prices have risen this week, with Brent trading
around $89 a barrel on Thursday, partly in anticipation of OPEC+
decreasing production.
The alliance, led by Saudi Arabia and Russia, showed its
readiness to stabilize markets with a symbolic cut at its last
meeting. Saudi Energy Minister Prince Abdulaziz bin Salman has
vowed to remain “preemptive and pro-active,” while Nigerian Oil
Minister Timipre Sylva said last week the group may be “forced”
to make additional reductions if crude prices fall again.
“We don’t exactly know what we can do to fix this, but for
us, the only instrument that is available is to cut production
if prices go too low,” Sylva said.
Banks such as UBS Group AG and JPMorgan Chase & Co. have
said OPEC+ may need to cut at least 500,000 barrels a day to
stem the oil price slide. All but one of 19 traders and analysts
in a Bloomberg survey predicted the 23-nation alliance will
agree to a cutback.
“We certainly see a significant chance that the producer
group will opt for a substantial cut to try to signal that there
is indeed an effective circuit breaker in the market,” said
Helima Croft, chief commodities strategist at RBC Capital
Markets LLC. The drop could be as big a 1 million barrels a day,
she said.
At its last meeting on Sept. 5, the group agreed a token
reduction of 100,000 barrels a day for October, despite calls
from consuming nations to help tame rampant inflation by keeping
the taps open.
With gasoline prices retreating in the US since June, some
of that external pressure may be easing. Saudi Crown
Prince Mohammed bin Salman met US government officials including
White House Middle East Coordinator Brett McGurk last week in
Jeddah.
That came shortly after Prince Mohammed had a phone call
with Russia’s President Vladimir Putin, during which they
reaffirmed their commitment to OPEC+.