OPEC Cuts Oil Production After Prices Fall

OPEC on Monday said it would slightly reduce oil production after prices on crude oil fell, CNN reports.

OPEC and its allies, including Russia, agreed to produce 100,000 fewer barrels per day starting next month.

The announcement comes just a month after OPEC and its allies agreed to boost production in September by the same amount, about 0.1% of global demand, amid pressure from the U.S. and other western countries.

OPEC+ agreed to "revert to the production level of August 2022 ... noting that the upward adjustment of 0.1 [million barrels per day] to the production level was intended only for the month of September 2022," the group said in a statement.

Price changes:

Crude oil futures rose about 3.6% on Monday morning to around $96 per barrel.

But oil prices have fallen more than 20% since June and fell by 7% in the U.S. last week alone.

Gas prices, which hit over $5 in June, have fallen to around $3.79 in the U.S.

The decline has been fueled by concerns that interest hikes by central banks and COVID lockdowns in China could slow global growth and oil demand.

European gas skyrockets:

European gas prices jumped more than 25% on Monday after Russian state-owned energy company Gazprom announced it would not reopen the Nord Stream 1 pipeline, the main gas pipeline to Europe, due to a leak.

The pipeline had been scheduled to reopen on Saturday but the company announced it would remain closed indefinitely after the G7 agreed to impose a price cap on Russian oil.

 

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