The OPEC+ alliance appears to be preparing forBig cuts in oil production when it meets later on Wednesday, limiting supplies in an already tight market Despite pressure from the United States and other consuming countries to pump more.
A possible OPEC + production cut may lead to a recovery in oil prices, which fell to about $ 90 from 120 three months ago, due to fears of a global economic recession, raising US interest rates and a rise in the dollar.
And sources told “Archyde.com”, this week, that OPEC + is working on cuts exceeding one million barrels per day.
On Tuesday, an OPEC source said the cuts could reach 2 million barrels per day.
And sources said, it is still not clear whether the cuts may include additional voluntary cuts by members or whether they may include the group’s current production shortage.
OPEC production is currently three million barrels per day below its target, and the inclusion of those barrels will mitigate the impact of the new cuts.
“If oil prices rise on massive production cuts, it is likely to irritate the Biden administration ahead of the US midterm elections,” Citi analysts said in a note.
“There may be more political backlash from the United States, including additional releases of strategic stocks,” they added, referring to a US anti-OPEC law.
Brent crude, the global benchmark, rose 3% on Tuesday, topping $91 a barrel.
The West has accused Russia of using energy as a weapon at a time when Europe is suffering a severe energy crisis and may face gas and energy rationing this winter in a blow to its industry.
In return, Moscow accuses the West of weaponizing the dollar and financial systems such as Swift in response to Russia’s sending of troops to Ukraine in February.