OPEC+ cuts oil production starting November 2022
For the past several weeks, motorists have been enjoying fuel price rollbacks. With threats of a global recession looming along with the continued increase of interest rates by the US Federal Reserve, oil players had no choice but to lower gasoline and diesel prices.
There were also some weeks of price hikes, but unlike what happened earlier this year when fuel prices skyrocketed to new heights, the current situation is seeing oil prices easing up. However, the next several weeks could see the price of oil shooting back up.
Recently, the Organization of the Petroleum Exporting Countries (OPEC+) announced that they will reduce oil production by 2 million barrels per day, a move that will likely send oil prices soaring once more. This represents the most significant cut in oil production ever since the pandemic.
This was made official after the organization and its allies announced the news in Vienna during its first meeting since the pandemic started. The group said that the decision to reduce oil production was made due to the uncertainty surrounding the global economy and oil market outlooks. While the reduction looks small on the global scale, the cutting of 2 million barrels per day is actually the equivalent of around 2% of global oil demand.
The cut in oil production will begin in November later this year. However, the price of Brent crude oil could soar to over USD 100 as early as next week. Currently, it's hovering between USD 92 to 93 per barrel. Should the price of crude oil actually go up next week, we can expect the prices of gasoline and diesel to increase as well.
In the local setting, the cutting of oil production by OPEC+ next month could undo the several weeks of fuel price rollbacks that motorists experienced. Combined with the fact that inflation jumped to 6.9%, cash-strapped motorists will have no choice but to bear the brunt of the possible fuel price hikes in the coming weeks.
With another week coming to a close, we'll be keeping our eyes peeled for any information about the possible estimates of next week's fuel price adjustments.