Oil prices retreat ahead of OPEC+ meeting

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Oil prices increase

Oil prices in the international market moderated very slightly on Wednesday after gaining more than 3% in the previous session ahead of a meeting of OPEC+ producers to discuss a big cut in crude output.

Traders said a stronger dollar was the main reason for the slightly easier prices, as it reduced demand from buyers using other currencies.

At around 05:26 GMT, the Brent crude futures fell by 10 cents, or 0.11%, to $91.70 a barrel, after climbing $2.94 in the previous session. Similarly, the US WTI crude futures fell by 20 cents, or 0.23%, to $86.32 per barrel.

Oil prices

The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together called OPEC+, will be meeting in Vienna later on Wednesday to discuss output cuts of up to 2 million barrels per day (bpd), an OPEC source said.

This would be the biggest move yet since the COVID-19 pandemic to address oil market weakness.

How Oil Prices Could Hit $65

The meeting will take place on October 5 against the backdrop of falling oil prices and months of severe market volatility, which prompted top OPEC+ producer Saudi Arabia to say the group could cut production.

Voluntary cuts by individual members could come on top of this, making it their largest cut since the start of the COVID-19 pandemic, OPEC sources said.

OPEC+, which combines OPEC countries and allies such as Russia, has refused to raise output to lower oil prices despite pressure from major consumers, including the United States, to help the global economy.

Oil prices rise as OPEC+ agree on small production cut

Prices have nevertheless fallen sharply in the last month due to fears about the global economy and a rally in the US dollar after the Federal Reserves raised rates.

Federal Reserve hikes key interest rate by 0.75% points

A significant production cut is poised to anger the United States, which has been putting pressure on Saudi Arabia to continue pumping more to help oil prices soften further and reduce revenues for Russia as the West seeks to punish Moscow for sending troops to Ukraine.

Saudi Arabia has not condemned Moscow’s actions amid difficult relations with the administration of US President Joe Biden.

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