OPEC+ briefings turn increasingly hawkish, 1m bpd cuts flagged
Quantum Commodity Intelligence – The latest round of pre-OPEC+ media briefings, where authorised delegates give off-the-record comments to reporters, turned increasingly hawkish over the weekend, flagging cuts higher than previously discussed.
While the delegates are not named, the comments fed to various media outlets reveal the latest thoughts from individual producers or the broader group, which in part are to gauge market reaction.
The OPEC+ meeting comes after the September monthly average price for benchmark Middle East Dubai crude retreated nearly 6% versus the previous month, according to Quantum data, as prices tumbled for a third consecutive month on demand slowdown fears.
Quantum's monthly average price for November-loading Dubai was $90.91/b, or a fall of 5.88%. That compares with $96.59/b for October-loading crude and the 14-year high of $113.24/b for August-loading barrels traded during June.
The following is summary of what media outlets reported following the weekend briefings.
Wall Street Journal
Delegates told the WSJ that OPEC+ is considering a cut of more than 1 million bpd, as concerns about a slowing global economy have dragged oil prices down at their fastest pace since the Covid-19 outbreak began in early 2020.
Reuters
OPEC+ will consider an oil output cut of more than a million barrels per day (bpd), OPEC sources said on Sunday, in what would be the biggest collective move yet since the COVID-19 pandemic to address oil market weakness.
Last week, Moscow briefed Reuters that Russian proposals would like to see OPEC+ cutting 1 million bpd or one percent of global supply.
Financial Times
The FT reported OPEC+ plans substantial oil production cut to prop up prices group expected to discuss reduction of more than 1 million bpd at Wednesday's meeting. Saudi Arabia is keen to lower output both to support prices and so it can keep some production capacity in reserve.
Bloomberg
Also reported that OPEC+ will consider cutting oil output by more than 1 million bpd, according to delegates, when it meets in person on Wednesday for the first time in more than two years. The report said a larger-than-expected reduction would reflect the scale of the producer group's concern that the global economy is slowing in the face of rapidly tightening monetary policy.
A final decision won't be made until oil ministers meet in OPEC's Vienna headquarters, the delegates said.
Argus Media
OPEC and its partners will consider cutting collective crude output quotas by more than 1 million bpd. Discussions are ongoing, but consensus appears to be moving towards the need for the group to make a more significant adjustment than it has done in recent months.
