News ID: 324433
Published: 0325 GMT October 03, 2022

Oil jumps more than $4 as OPEC+ weighs biggest output cut since 2020

Oil jumps more than $4 as OPEC+ weighs biggest output cut since 2020
REUTERS

Oil prices jumped more than $4 on Monday as OPEC+ considers reducing output by more than 1 million barrels per day (bpd) to buttress prices with what would be its biggest cut since the start of the COVID-19 pandemic.

Brent crude futures were up $4.38, or 5.1%, to $89.52 a barrel. U.S. West Texas Intermediate crude was up $4.79, or 6%, at $84.28, Reuters reported.

Oil prices have tumbled for four straight months since June, as COVID-19 lockdowns in top energy consumer China hurt demand while rising interest rates and a surging U.S. dollar weighed on global financial markets.

To support prices, the OPEC and its allies, known collectively as OPEC+, is considering an output cut of more than 1m bpd ahead of Wednesday's meeting.

That figure does not include additional voluntary cuts by individual members, one OPEC source added.

If agreed, it will be the group's second consecutive monthly cut after reducing output by 100,000 bpd last month.

OPEC+ missed its production targets by nearly 3m bpd in July, two sources from the producer group said, as sanctions on some members and low investment by others stymied its ability to raise output.

While prompt Brent prices could strengthen further in the immediate short term, concerns over a global recession are likely to limit the upside, consultancy FGE said.

The dollar index fell for a fourth consecutive day on Monday after touching its highest level in two decades. A cheaper dollar could bolster oil demand and support prices.

 

   
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