First it was 500Kb/d, then 1 million. Now, according to both Bloomberg and the WSJ, OPEC+ will likely announce that it is slashing output by more than a million barrels per day when it meets this Wednesday in Vienna.

... the larger-than-expected reduction will reflect the scale of concern that central banks are rushing to spark a global recession, which in turn is crippling oil demand and demanding a supply response. The dollar, which has hit record highs pretty much every day in Q3, has also weighed on prices.


That said, a final decision on the size of the cuts won’t be made until ministers meet, Bloomberg's sources said while the WSJ noted that because the ultimate decision will be hotly debated, the group decided to meet in person in Vienna on Wednesday for the first time since the start of the pandemic. 

Other options being considered include a smaller reduction of 500,000 barrels a day or as much as 1.5 million barrels a day.

The Journal's Summer Said noted that the option to cut more than 1 million barrels a day is backed by Russia, the group’s biggest non-OPEC partner. But the cartel’s biggest exporter, Saudi Arabia, has some reservations on the size of the cut, the delegates said.

This week's cut will come after OPEC+ agreed last month to reduce oil production for the first time in more than a year, saying it would cut about 100,000 barrels a day amid fears of a global recession. 

The move ended an 18-month era of production increases for OPEC+. The group slowly brought crude back onto the market after a sharp cut during the pandemic, when demand plunged.

Brent crude soared above $125 a barrel following Russia’s invasion of Ukraine in February. 

It’s since dropped to $85 sparked by Biden's desperate drain of the US strategic petroleum reserve meant to avoid a crash for Democrats at the midterms, and tempering the spectacular windfall enjoyed by the Saudi Arabia, Russia, the United Arab Emirates and other members of the coalition.

The 23-nation alliance is scheduled to meet on Wednesday at its headquarters in Vienna,  OPEC’s secretariat said a statement on Saturday. The group has been meeting on-line on a monthly basis and wasn’t expected to arrange an in-person gathering until at least the end of this year.

In recent weeks, banks such as JPMorgan said OPEC+ may need to lower output by least 500,000 barrels a day to stabilize prices. RBC's Helima Croft said the group may opt for a cut twice that large. It now appears that the final cut will be even bigger.

“I suspect that they might not want to go in person for a minor move,” Croft said.

Whether it is 1 million or 1.5 million, one should consider that in just a few weeks Biden's puppetmasters will finally stop the SPR's daily 1 million barrel drain, effectively translating into an output cut of as much as 2.5 million barrels. 

Needless to say, that will send the price of oil soaring, will end the recent string of declining gas prices and stun the already reeling US consumer with sharply higher prices at the pump just in time for the recession and the mass layoffs that will follow once the midterm elections are over.