It only took minutes for OPEC+ to agree to cut production by 100k bpd. That unwinds last month's announced increase.
The new quotas will take effect for October.
This mvoe is more about signaling than anything else. 100,000 barrels of oil per day is next-to-nothing in a 100 million bpd market but it shows that OPEC+ wants to set a floor near $100/barrel in Brent.
In reality, OPEC members in the current quota system undershot output targets by 1.4 million barrels per day in August so they're not hitting their quotas anyway.
On the daily WTI crude oil chart, this adds some support from $85/86 but bulls will still be uncomfortable here.
The next OPEC meeting has been scheduled for October 5.
I'm eager to hear some of the commentary from OPEC members about what's coming next. This is also a bit of a slap in the face to the US, which is releasing emergency reserves.
Update: The OPEC+ chairman is to consider calling for an OPEC and non-OPEC ministerial meeting anytime to address market developments, if ncessary.
Full OPEC+ statement:
In view of current oil market fundamentals and the consensus on its outlook, the OPEC and participating non-OPEC oil producing countries decided to:
Reaffirm the decision of the 10th OPEC and non-OPEC Ministerial Meeting on 12 April 2020 and further endorsed in subsequent meetings including the 19th OPEC and non-OPEC Ministerial Meeting on 18 July 2021.
Revert to the production level of August 2022 for OPEC and non-OPEC Participating Countries for the month of October 2022 as per the attached table, noting that the upward adjustment of 0.1 mb/d to the production level was intended only for the month of September 2022.
Request the Chairman to consider calling for an OPEC and non-OPEC Ministerial Meeting anytime to address market developments, if necessary.
Reiterate the critical importance of adhering to full conformity and to the compensation mechanism. Compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting.
Hold the 33rd OPEC and non-OPEC Ministerial Meeting on 5 October 2022.