Message From Producer Groups Outweighs Cut

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  • Opec-plus this week surprised markets by reverting to August oil production levels for October, implying an official 100,000 barrel per day output cut.

  • The decision will have a negligible impact on the physical oil market, but delivers a strong message that the alliance will do what it believes is needed to ensure market stability.

  • Sanctions pressures on key member Russia, consumer calls for higher output, and a creaking quota system meanwhile present challenges the group may need to address in the coming months.

Opec-plus's decision to pump at August levels in October, officially representing a cut of 100,000 barrels per day versus September's levels, was a surprise to many market watchers. It came within days of G7 finance ministers agreeing to move forward with their plan to put a price cap on Russian oil and their call for producers to increase output “to decrease volatility in energy markets.”

Opec-Plus Supply , Opec/Opec-Plus, Sanctions
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