The full OPEC+ group has agreed to cut crude oil production by its members by 2 million barrels per day from the month of November 2022.
This is as the rebound of oil prices continues with Brent crude trading at $93.25 per barrel and the American WTI trading at $87.71 per barrel as of Wednesday afternoon.
According to a statement from OPEC, the decision was taken after the 45th meeting of the Joint Ministerial Monitoring Committee (JMMC) and the 33rd OPEC and Non-OPEC Ministerial meeting on Wednesday, October 5, 2022, at the OPEC Secretariat in Vienna, Austria.
The output cut is coming on the heels of the uncertainty that surrounds the global economy and oil market outlooks and the need to enhance the long-term guidance for the oil market.
The group, at the meeting, adjusted the frequency of the monthly meetings of the Joint Ministerial Monitoring Committee to become every 2 months with the OPEC and non-OPEC Ministerial Meeting held every 6 months in accordance with the ordinary OPEC scheduled conference.
The group also decided to grant the JMMC the authority to hold additional meetings or to request an OPEC and non-OPEC Ministerial Meeting at any time to address market developments if necessary.
The statement reads, ‘’The 45th Meeting of the Joint Ministerial Monitoring Committee (JMMC) and the 33rd OPEC and Non-OPEC Ministerial Meeting took place in person at the OPEC Secretariat in Vienna, Austria, on Wednesday, 5 October 2022.
‘’In light of the uncertainty that surrounds the global economy and oil market outlooks, and the need to enhance the long-term guidance for the oil market, and in line with the successful approach of being proactive, and preemptive, which has been consistently adopted by OPEC and Non-OPEC Participating Countries in the Declaration of Cooperation, the Participating Countries decided to:
There had been earlier reports that the idea of an oil production cut by OPEC and its allies had led to panic within the United States Government with White House officials and representatives meeting with influential members of the group from going ahead with such a decision.
The US had described the prospect of a production cut as a “total disaster” and warned that it could be taken as a “hostile act.”
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