OPEC+ agrees small oil production cut

Reuters, 5 September 2018 - On Monday, OPEC and its partners, led by Russia,

agreed to a modest decrease in oil output to support prices, which have fallen due to concerns about an economic downturn.

For October, the oil producers will reduce their output by 100,000 barrels per day (bpd), or about 0.1% of the world's demand.

They also concurred that Saudi Arabia, the organization's dominant member, may convene an emergency meeting at any moment if unrest continues.

OPEC has been witnessing dramatic swings in oil prices, so the decision effectively maintains the status quo.

According to Matthew Holland of Energy Aspects, "OPEC+ is worried of extended price volatility created by weak economic mood, scant liquidity,

and increased China lockdowns, as well as uncertainty about a possible U.S.-Iran deal and moves to construct a Russian oil price cap."

Saudi Arabia, a major OPEC producer, said last month that output reductions would be necessary to address what it perceives as irrational fluctuations in oil prices.

Benchmark On worries of a Western economic slowdown and recession, the price of Brent crude oil has fallen to approximately $95 per barrel from $120 in June.