OPEC+ Oil Producers Signal They Will Limit Their Output Amid Market Volatility

A source from OPEC+ told the press that oil producers are likely to lower their target output by between 500,000 and 1 million barrels per day.

The output target will become official when members of OPEC+ meet on Oct. 5.

Russia reportedly desired an output cut closer to 1 million barrels per day, while other members were targeting a decrease closer to 500,000 barrels per day.

“Maybe during the weekend or Monday it will be more clear,” the OPEC+ source said. “Usually, the consultations conclude just before the meeting date.”

OPEC+ is composed of members of the Organization of the Petroleum Exporting Countries, along with other allies, including Russia.

The cut in target output comes after OPEC+ lowered their target output by 100,000 in September. That represented the organization’s first output cut since 2020.

The group did, however, return the quota back to August output targets in October.

Back in August, OPEC’s top producer, Saudi Arabia, indicated that they may need to make cuts in their output due to market volatility.

On Monday, crude oil hit a 9-month low of $83.65 per barrel.

OPEC+ has indicated a willingness to be more reactive to market fluctuations. During their September meeting, the group agreed to “request the Chairman to consider calling for an OPEC and non-OPEC Ministerial Meeting anytime to address market developments, if necessary.”

Stephen Brennock, an oil broker for PVM, reinforced the expectation that OPEC+ will make further cuts to their oil output.

“Odds are that OPEC+ will trim their output,” said Brennock. “What’s more, $90 oil is non-negotiable for the OPEC+ leadership, hence they will act to safeguard this price floor.”

Experts believe that, by limiting their output, OPEC+ will drive up the price of oil.