OPEC+ meets to debate production quotas; weighs in fresh output cuts to boost oil prices
The Organization of the Petroleum Exporting Countries and its allies, or OPEC+ met in Vienna on June 4 to consider more oil production cuts in a bid to bolster oil prices. The 13-member OPEC led by Saudi Arabia is consulting with 10 other oil majors, including Russia, to review the grouping’s future output policy.
Analysts had largely expected OPEC producers to maintain their current policy, but signs emerged this weekend that the 23 countries may make deeper cuts. An output cut of one million barrels per day (bpd) was one of the options being discussed, according to a report by news agency Reuters.
In April, several OPEC members agreed to voluntarily cut production by more than one million bpd — a surprise move that briefly shored up prices but failed to bring about lasting recovery. If approved, the new cut would take the total volume of reductions to 4.66 million bpd, or around 4.5 per cent of global demand.
OPEC+ pumps around 40 per cent of the world’s crude, meaning its policy decisions can have a major impact on oil prices. Typically, production cuts take effect the month after they are agreed but ministers could also agree a later implementation. They could also decide to hold output steady.
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Updated: 04 Jun 2023, 05:39 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.