October 14, 2022
UP AGAIN — The price of an OPEC barrel surged, albeit only briefly, after OPEC+ decided October 5 to make a huge cut in output of 2 million barrels a day beginning November 1. That’s 2 percent of global daily consumption. Goldman Sachs said the cartel has often cut output quotas in the face of weakening demand, but has never before done so in such a tight market. Many saw it as a political move in support of Russia, which is the second biggest producer in the 23-nation combination of the 13-nation OPEC and the 10 countries led by Russia that make up the “plus.” But it isn’t clear what the decision will really mean given that the 23 countries were already 3.4 million barrels a day below their joint quota in August. So, the group would actually have to raise output to fulfill the announced cut.
