OPEC+ faces what to do about lower oil prices; drivers cheer

FRANKFURT, Germany (AP) — OPEC and allied oil-producing countries are weighing how much crude to ship to a troubled global economy as recession fears have sent prices far down from summertime peaks.

And that is a concern for producers like Saudi Arabia and Russia, whose state coffers benefited from oil prices that peaked in June at over $120 per barrel, but a blessing for U.S. drivers who have seen pump prices fall along with the cost of crude. U.S. oil traded at around $89 per barrel Monday, while international benchmark Brent traded around $95.50.

The alliance of OPEC members led by Saudi Arabia and non-members including Russia is determining production levels for October after deciding Aug. 3 on only a token 100,000 barrel per day increase for September.

Analysts say Monday's meeting could result in no change in production levels after the group in August finished restoring cuts made during the depths of the COVID-19 pandemic following months of steady, moderate increases.

OPEC+ is in “standby mode” but could “signal their willingness to adjust output at short notice if required,” according to Commerzbank Research.

Saudi Energy Minister Abdulaziz bin Salman said Aug. 22 that the alliance could cut production at any time. That got attention in markets because Saudi Arabia is the dominant OPEC member, and his comments briefly sent oil higher.

Analysts at Eurasia Group said, however, that “no immediate output reduction is expected” and that bin Salman may have simply sought to support the sagging price level.

His remarks "reflect a desire to prop up gradually falling crude prices" with a preferred level of around $100 per barrel for Brent, Eurasia Group analysts Raad Alkadiri and Milo McBride wrote in a note. They noted that higher prices have delivered a financial...