Sources say OPEC+ is weighing the rollover against a slight production cut

A picture of the emblem of the Organization of the Petroleum Exporting Countries (OPEC) at its headquarters in Vienna, Austria, August 21, 2015. REUTERS/Heinz Peter Bader/File Photo

LONDON (Reuters) – Six OPEC+ sources said that OPEC+ was likely to keep oil production quotas unchanged for the month of October at Monday’s meeting, although some sources did not rule out a slight production cut to support prices, which have fallen on fears of that happening. . Economic slowdown.

Six OPEC+ sources said on Sunday and Monday that the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, collectively known as OPEC+, are expected to pass the current policies.

However, three of the sources said the producer group may also discuss a small 100,000 bpd cut.

Monday’s OPEC+ meeting comes against a complex backdrop that includes a potential increase in supplies of Iranian crude returning to the market if Tehran can revive its 2015 nuclear deal with world powers.

Meanwhile, Russia said it would stop supplying countries that support the idea of ​​capping Russian energy supplies due to its military conflict in Ukraine.

Meanwhile, Russian gas shipments to Europe have been reduced further, which is likely to lead to a further price surge. Read more

Brent crude has fallen to around $95 a barrel from $120 in June, amid fears of an economic slowdown and recession in the West.

Iran is expected to add 1 million barrels per day to supply, or 1% of global demand, if sanctions are eased, although prospects for a nuclear deal appeared less clear on Friday. Read more

Saudi Arabia, the largest producer in the Organization of the Petroleum Exporting Countries, last month signaled the possibility of cutting production to address what it sees as exaggerated declines in oil prices. Read more

“OPEC+ is wary of prolonged price volatility resulting from weak macroeconomic sentiment, poor liquidity, renewed Chinese shutdowns, as well as uncertainty over a potential US-Iran deal and efforts to cap Russian oil prices,” said Matthew Holland of Energy Aspects. .

However, signs from the physical market suggest that supply remains tight and many OPEC countries are producing below targets while new Western sanctions threaten Russian exports.

“Reducing production won’t make them any friends at a time when the world is facing a cost-of-living crisis,” … a more sensible option might be to hold this month and revisit in the future when there is more clarity, said analyst Craig Erlam at Oanda.

Additional reporting by Rowena Edwards and Olesya Astakhova.

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