Price of Oil Soars , on Fears of Massive , OPEC Production Cut.
On October 3, oil prices skyrocketed to $3 a barrel as OPEC+ announced a potential reduction of output by over one million barrels per day (bpd).
Al Jazeera reports that the OPEC+ said the move would be meant to buttress prices with the biggest cut since the beginning of the COVID pandemic.
Reuters reported that sources within the Organization of the Petroleum Exporting Countries (OPEC+) say the massive cut could be decided upon in an October 5 meeting.
Another source reportedly said that figure excludes additional voluntary cuts made by individual OPEC members.
Dennis Kissler, senior vice president of trading at BOK Financial, said most traders were expecting a cut of about 50,000 bpd.
Last month, the group reduced output by 100,000 bpd.
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After a year of tolerating extremely high prices, missed targets and severely tight markets, the [OPEC+] alliance seemingly has no hesitation when it comes to acting rapidly to support prices amid a deterioration in the economic outlook, Craig Erlam, Oanda market analyst, via Al Jazeera.
After a year of tolerating extremely high prices, missed targets and severely tight markets, the [OPEC+] alliance seemingly has no hesitation when it comes to acting rapidly to support prices amid a deterioration in the economic outlook, Craig Erlam, Oanda market analyst, via Al Jazeera.
According to Al Jazeera, two sources within OPEC+ say the group missed production targets by almost three million bpd in July.
Those sources cited sanctions on some OPEC+ members and low investment by others as causes for the group's inability to raise output.
According to consultancy FGE, while prices could strengthen in the short term, long term concerns regarding a potential global recession remain.
According to consultancy FGE, while prices could strengthen in the short term, long term concerns regarding a potential global recession remain
