OPEC+ agrees to cut output by 100,000 bpd in October

OPEC and allied oil-producing countries agreed on Monday to cut oil production by 100,000 barrels per day from next month.

The move, aimed at stabilising global markets, will take supplies back to August levels.

OPEC+ also left the door open to resume discussions on output targets before the next monthly meeting on 5 October.

Capital Economics said the cut was just symbolic and will have no impact on supply.

Chief commodities economist Caroline Bain said: "The cut is not a complete surprise as there have been mutterings for a few weeks, notably from the Saudi energy minister, Abdul Aziz Bin Salman al Saud, that a cut was required in the wake of prices falling from around $120 per barrel in June to below $100 currently.

"The cut reverses the 100,000 bpd increase announced at the last meeting, which the group now says was only for the month of September. Oil prices were rising this morning on the prospect of a cut, but we maintain that both last month’s output increase and this month’s cut are little more than symbolic.

"The bigger picture is that OPEC+ is producing well below its output target and this looks unlikely to change given that Angola and Nigeria, in particular, appear unable to return to pre-pandemic levels of production."