Oil prices fell slightly in the morning trading today, Wednesday, after rising more than 3% in the previous session, ahead of the meeting of “OPEC Plus” (OPEC +) producers to discuss a significant reduction in crude production.

Traders said that the dollar's rise was the main reason for the slight decrease in prices;

Demand from buyers using other currencies has decreased.

Brent crude, the global benchmark, fell 0.46% and reached $91.4 a barrel at 9:00 UTC, after rising $2.94 in the previous session.

US West Texas Intermediate crude futures fell 0.6% to $86.02 a barrel, after rising $2.3 in the previous session.

An OPEC source told Reuters that the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia - the so-called OPEC Plus grouping - will meet in Vienna later on Wednesday to discuss production cuts of up to two million barrels per day.

This meeting is the first attended by OPEC and its allies since March 2020.

And the financial news agency Bloomberg reported that the participants in the meeting were discussing a cut of about two million barrels per day starting next November, double most of the initial expectations.

A reduction of this size will be the largest production cut by "OPEC Plus" since demand was affected by the "Covid-19" pandemic in 2020.

American reaction

An informed source told Reuters that the United States is urging "OPEC Plus" producers to avoid making deep cuts, while President Joe Biden seeks to prevent a rise in gasoline prices in the United States.

For its part, AFP quotes Tamash Varga, an expert at BV Energy, as saying, "(The decision to cut) will not be welcomed by the White House with the approach of the mid-term elections next month."

As "City Analysts" said in a note, "If oil prices rise due to large production cuts, this is likely to irritate the (Biden) administration before the US midterm elections."

"There may be further political reactions from the United States, including additional drawdowns of strategic stocks," they added.


JP Morgan also expected Washington to take countermeasures by releasing more stockpiles.

In this atmosphere, experts talk about a gradual reduction over time that will be less "provocative" to the United States.

On the other hand, the decision to cut production will be appropriate for Russia, "and therefore it can be seen as a further escalation of geopolitical tension," according to Ipek Ozkardskaya, an analyst at the Swissquote group.

Effects and predictions

The real impact on supply - through production cuts - will be limited because many of the "OPEC Plus" countries are already pumping much less than their current quotas.

Last August, OPEC Plus did not achieve its production target by a difference of 3.58 million barrels per day.

However, ANZ Research analysts said in a note that agreeing to the deep cuts "would send a strong message that the group is determined to support the market," adding that it "leads to significant market tightness".

US crude oil inventories fell by about 1.8 million barrels for the week ending September 30, according to market sources, citing figures from the American Petroleum Institute on Tuesday.

Last September, the "OPEC Plus" group slightly lowered its target (by 100,000 barrels) and said it was ready for a further reduction.

Since then, the price of the two global benchmarks has fallen and returned to levels last January, far from the rise recorded last March at the beginning of the war in Ukraine, when the price of Brent reached $139.13 a barrel and West Texas Intermediate crude oil $130.50.

Meanwhile, Chris Beck, a member of Vitol's executive committee and chairman of VTTI, said Wednesday that he expects Brent crude to approach $100 a barrel by the end of the year.

Beck added that the market value of Brent crude ranged between 80 and 100 dollars per barrel.