The OPEC+ alliance on Oct. 5 agreed to cut oil output by as much as 2 million b/d—a figure that could push oil and gas prices higher after weeks of downtrends.
The move comes despite calls from the US to boost output to help with ease inflation and boost the global economy and represents a reversal in the alliance's production policy.
OPEC+ slashed output by a record 10 million b/d in early 2020 when demand collapsed due to the COVID-19 pandemic. The group has since gradually lifted record production cuts, even as several OPEC+ countries struggle to meet their quotas.
However, White House national security spokesman John Kirby downplayed the new OPEC+ deal. “In some ways, the cuts announced this time are really just bringing them back into line with actual production,” he said.
JPMorgan analysts expected Washington DC to put in place counter measures by releasing more oil stocks.
Goldman Sachs analysts said they estimated the real production cuts would therefore amount to 400,000-600,000 b/d mainly by Gulf OPEC producers such as Saudi Arabia, Iraq, UAE, and Kuwait.