Hurricane Ian, was touted to become the next menace of oil production and refining in the US Gulf of Mexico. As of Tuesday morning, two oil majors have decided to shut oil platforms in anticipation, and the hurricane is now expected to make landfall in Florida.
Hence, oil market bulls see OPEC Plus as their ultimate line of defense against a meager macroeconomic background and a strengthening dollar, with all eyes on Russia, which is likely to propose a major production cut at the next meeting on October 05, 2022.
Russia is likely to propose at the next meeting that the group cut one million barrels per day from the group's collective output, Reuter’s sources familiar with Russian thinking shared on Tuesday.
The news comes just a day after comments made at Monday's APPEC's oil conference that suggested global oil stocks are set to rise next year amid weak demand and a strong dollar—and that OPEC would have to cut output if they wanted to keep prices from falling further.
The cartel would have to make oil cuts between 500,000 and one million bpd to keep Brent above US$90/barrel, Gary Ross, chief executive of Black Gold Investors, said at the meeting on Monday.
Now Russia itself could recommend a million bpd cut—and as one of the two largest members of the OPEC plus group, the county's recommendations hold weight.
The next meeting will be held on October 05, which will determine the output targets for November. It is also in November when the current batch of US SPR releases, which have helped to prop up low oil inventories, will cease.
OPEC Plus production cut for October by 100,000 bpd at the previous meeting, demonstrating its willingness—to respond to the changing oil markets in an expeditious manner.
Brent crude was trading up US$1.47 on Tuesday (+1.75%) to US$85.53/barrel, with mysterious and major leaks detected on Nordstream 1 and 2 pipelines that put the likelihood of gas flows resuming to Europe yet this year extremely low.
Some industry analysts have suggested that OPEC Plus could move to defend US$90/barrel.
