- WTI jumps nearly 5% on Monday amid reports of a potential OPEC+ output cut
- OPEC+ is weighing a substantial output cut of more than 1 MMBbl/d for November
- Interest rates and a strong dollar continue to weigh on the market
- The dollar index fell for a fourth consecutive day on Monday after touching its highest in two decades
- A cheaper dollar could bolster oil demand and support prices
- OPEC and its allies, known collectively as OPEC+, are considering an output cut of more than 1 MMBbl/d ahead of Wednesday's meeting (BBG)
- The cartel weighs cutting oil production to stem a recent slump in prices
- If OPEC+ decides to reduce their collective production by 1 MMBbl/d, it would be the largest cut since 2020
- Additionally, a massive production cut may have the potential of adding another shock to the global economy that is already dealing with energy-driven inflation
- Furthermore, a production cut would result in more spare capacity, which would put downward pressure on longer-term prices, according to energy consultant firm FGE
- Any reduction will occur one month before EU sanctions on Russian crude shipments take effect on December 5, complicating the outlook
- Over the course of the year, the difference between the group's actual production and its quota has grown, with August's production falling more than 3.6 MMBbl/d behind the target volume