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OPEC+ panel recommends oil output cut by 2 million barrels

OPEC+, Organization of Petroleum Exporting Countries, and its allies have agreed to a cut of 2 million barrels per day, according to a panel in its meeting in Vienna. 

This was disclosed by its Joint Ministerial Monitoring Committee before they make a final policy decision according to delegates asking not to be named as reported by Bloomberg. 

The planned cuts would also strike a major blow to the United States’ efforts to keep the prices stable due to inflationary pressures in the world’s largest economy. 

What they reported: 

The Panel, which is made up of OPEC+ ministers, agreed to the output before a final policy decision was agreed according to the report. 

 Bloomberg added that if the full meeting of the Organization of Petroleum Exporting Countries and its allies ratify the proposal, it would have a smaller impact on global supply than the headline number suggests because several countries are already pumping well below their quotas.  

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“That means they would already be in compliance with their new limits without having to reduce production”. 

The reduction would mean eight countries to reduce actual production and achieve the real cut of only 880,000 barrels a day, according to Bloomberg calculations based on September output figures. 

The move is expected to see an increase in crude prices, which climbed to $92 following news of the incoming cuts. Oil prices have been higher this year following Russia’s invasion of Ukraine, and the supply cut as Europe seeks to reduce reliance on Russia. 

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What you should know 

Nairametrics reported earlier this week that delegates predict that the group will discuss reducing oil output by more than 1 million barrels per day.  

This comes as the producer group’s worry that the global economy is slowing down quickly in the face of quickly tightening monetary policy would be reflected in a larger-than-expected drop. The delegates stated that a final choice won’t be made until after the oil ministers gather in OPEC’s Vienna headquarters.  

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