Oil Surges After OPEC+ Agrees On 100Kb/d Production Cut

OPEC+ has agreed to a 100kb/d reduction in oil output for October a delegate told Reuters.

Final statement #OOTT #opec pic.twitter.com/ejnWhjUm3Y

— Amena Bakr (@Amena__Bakr) September 5, 2022

The small cut would reverse the 100,000 barrels a day that OPEC+ said it would add to the market last month after President Biden’s trip to Saudi Arabia, the world’s largest oil exporter.

That much appears to be priced into futures markets, which remained about 2.7% higher at around the $95-level in Brent crude futures.

Bloomberg’s Javier Blas summed up the situation succinctly.

Since the G7 oil price cap was announced on Friday, Russia has retaliated cutting gas supply to Germany to zero, and joining forces with Saudi Arabia and others at OPEC+ to reduce global oil production.

I'm going to go to the pub to drink some beer now.

— Javier Blas (@JavierBlas) September 5, 2022