OPEC+ has agreed to cut production by 100,000 barrels per day in October, returning the targeted output to the level of August.
A statement said the meeting held today “noted the adverse impact of volatility and the decline in liquidity on the current oil market and the need to support the market’s stability and its efficient functioning”.
The 32cnd meeting, held today via videoconference, involved both OPEC and the wider OPEC+ group.
Saudi Arabia complained about volatility in August, in a move that was backed up publicly by Iraq and Equatorial Guinea.
In response to the volatility and “increased uncertainties”, the group moved to return production levels to August. This will see OPEC targeting production of 26.689 million bpd and non-OPEC at 17.165mn bpd.
Total production of the group will be 43.854mn bpd, it said.
The group, in August, agreed to boost production to 26.753mn bpd from OPEC and 17.202mn bpd from non-OPEC. This gave a total of 43.955mn bpd for September.
The group increased production by 100,000 bpd in a move it “only intended for the month of September”, it said.
The group needs to carry out “continuous assessment of market conditions and a readiness to make immediate adjustments to production in different forms”, it said. OPE+ has the “commitment, the flexibility, and the means” to face this challenge.
OPEC+ will meet again on October 5.
A number of traders have also expressed concerns about the vicious swings in the oil market. The theory goes that reduced liquidity is feeding price fluctuations, with little regard for supply and demand.
The oil futures market is completely broken. Moving down $10 in a day for no apparent reason
— Pierre Andurand 🇺🇦🌻🇫🇷🇪🇺 (@AndurandPierre) August 31, 2022
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