Reducing production is the master of the situation in the upcoming OPEC + talks... and an Iraqi expert expects
The alliance is holding talks related to reducing oil production, in addition to Moscow's proposal to reduce up to one million barrels per day in light of the deteriorating prices and the severe fluctuations in the market.
OPEC +, which includes OPEC and independent oil producers, including Russia, will meet on Wednesday, October 5, 2022, against the backdrop of the decline in oil prices after reaching their highest level in years in March, and sharp market fluctuations.
Some experts said that talks on reducing oil production focus on a possible increase in production cuts from 500,000 barrels per day to one million barrels per day to support the market.
Sources within OPEC stated that Russia is likely to demand the OPEC + group to reduce oil production by about one million barrels per day during the meeting, while another source in OPEC stated that the size of the likely reduction is close to 500,000 barrels per day.
Analysts at UBS in Switzerland warned of the danger of not reducing production, as they believe that the lack of intervention by the Organization of Petroleum Exporting Countries, OPEC and its allies will further exacerbate prices.
The meeting comes after a survey showed that OPEC oil production rose this month to its highest level since 2020.
According to the data, the group’s production exceeded the increase pledged during the month, as a result of the recovery of production in Libya and the strengthening of production by Gulf members under an agreement with allies in OPEC +.
The senior adviser on foreign policy and geopolitics of energy in Washington, Dr. Umud Shoukry, believes that OPEC intends to achieve stability in the market and protect the interests of member states.
Because of the decline in oil prices, he expected that the OPEC + alliance will reduce production capacity at its next meeting, otherwise oil prices will go down, explaining that the decline in crude prices is not in the interest of the economies of member states.
In an interview with Shafaq News, the oil expert, Muhammad Al-Hasani, expected that "the potential reduction ranges between 400 to 500 thousand barrels per day," describing it "that it will be a realistic reduction in light of the current circumstances."
He added that "OPEC's decision in the previous meeting to cut production by 100,000 barrels was not successful in light of the conditions the world is going through from the expected economic recession in America and Europe."
Al-Hasani indicated that "the reduction will be for the month of November, and it is possible to monitor the market during this period to know the direction of prices and address this over time, especially with the organization's ability previously to stop the deterioration of oil prices during the Corona pandemic."
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