OPEC+ announces big reduction in Oil production, fuel prices could shoot up soon
It’s more or less become an accepted fact that fuel prices are going to be unstable for the foreseeable future. All motorists on a weekly basis are kept on their toes awaiting the latest fuel price bulletin.
Unfortunately, our recent string of fuel price rollbacks has been put in jeopardy and could reverse course because of OPEC+‘s recent announcement.
OPEC+ to drastically cut down oil production
Specifically, OPEC+ announced that they will be cutting oil production by 2 million barrels per day, which is the biggest production cut since the start of the pandemic. This move threatens to push fuel prices to skyrocket in the coming weeks and months.
The group comprises the major oil producers in the world, such as Saudi Arabia and Russia. This latest reduction is equivalent to about 2% of global oil demand. The production cuts will start in November, and the Organization of Petroleum Exporting Countries (OPEC) and its allies will meet again in December.
In a statement, the group said the decision to cut production was made “in light of the uncertainty that surrounds the global economic and oil market outlooks.”
Although, some experts are saying that the global oil market will be oversupplied between now and the end of the year, which could soften the blow of production cuts on prices.
As daunting and shocking as the announcement is all we can do now is brace for all possibilities, it’s safe to say though that the announcement will surely affect fuel prices, whether good or bad, but the latter seems more likely.
