Oil Markets Focus On Upcoming OPEC+ Meeting
Ellen Wald | Oct 04, 2022 06:20
The Organization of Petroleum Exporting Countries (OPEC) and its partners from the Declaration of Cooperation (known as OPEC+) are scheduled to meet on Wednesday, Oct. 5. According to OPEC delegates, the ministers are currently discussing prices ended the third quarter at a loss, which would be the first quarterly loss in 2 years. However, the oil prices have risen since OPEC+ leaked news that the group is discussing a significant production cut.
Further price increases are likely to be tempered by ongoing concerns that a global recession will hurt global oil demand. If OPEC+ agrees to cut its production quotas by anything less than the maximum amount under discussion, oil prices are not likely to respond in a significant way.
However, if the OPEC+ meeting results in an agreement that includes extra “voluntary” cuts (i.e., production cuts that some members commit to make in addition to the pro rata cuts to the production quotas) traders should expect oil prices to increase, even if these amounts seem like minor additional cuts for certain countries.
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