OPEC, allies to cut oil output amid declining crude prices

Oil-producing alliance OPEC+ announced on Monday it will slightly lower oil production in October, eliminating the 100,000 barrel per day increase that began this month.

OPEC leaders made the decision after gathering for a meeting, where they noted the 100,000 barrel per day increase was only intended for September. OPEC produces around 28 million barrels per day.

The 13-member alliance said in a statement the “higher volatility and increased uncertainties require the continuous assessment of market conditions and a readiness to make immediate adjustments to production.”

The price for a crude barrel of West Texas Intermediate (WTI) oil climbed 3 percent after the announcement, reaching $90 per barrel, while Brent crude was also up 3 percent to $96 per barrel.

President Biden traveled to Saudi Arabia, the second largest OPEC member nation, over the summer as high gas prices beleaguered Americans and sunk his approval ratings.

After Biden met with Crown Prince Mohammed bin Salman and fist-bumped the Saudi leader, OPEC announced a mostly symbolic increase of 100,000 barrels per day for September.

Gas prices have fallen to a national average of $3.78, according to the American Automobile Association, a significant drop from a historic $5 a gallon in June.

The oil market is expected to tighten with Russia threatening to cut off Europe from its gas supply over tensions with the war in Ukraine.

The price for a barrel of crude oil has also fallen from a high of around $120 for both Brent and WTI.