According to representatives, the OPEC+ group of oil producers will consider cutting production by more than 1 million barrels per day when they meet in Vienna on Wednesday.
The larger-than-expected shortfall reflects the scale of concern that the global economy is rapidly slowing down due to increasingly tightening monetary policy. The strengthening of the dollar also affected the prices. Delegates said a final decision on the size of the cut would not be made until the ministers’ meeting.
Brent crude climbed above $125 a barrel in February after the outbreak of the Russo-Ukraine war. It has since fallen to $85, undercutting the spectacular wind gusts enjoyed by Saudi Arabia, Russia, the United Arab Emirates and other members of the coalition.
OPEC’s secretariat said in a statement on Saturday that the 23-nation coalition is scheduled to meet at its headquarters in Vienna on Wednesday. It has been meeting online on a monthly basis and was not expected to arrange an in-person meeting until at least the end of this year.
Banks including JPMorgan Chase & Co said OPEC+ may need to reduce production by at least 500,000 barrels per day to stabilize prices. Helima Croft, chief commodities strategist at RBC Capital Markets LLC, said the group could opt for twice the big cut. “I suspect they don’t want to go personally for a small trick,” said Croft.
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