Oil jumps more than 3% as OPEC+ mulls cuts of up to 1 million barrels per day

By Reuters October 2, 2022 | 06:12 pm PT

Pump jacks operate at sunset in Midland, Texas, U.S., February 11, 2019. Photo by Reuters/Nick Oxford

Oil prices jumped more than 3% in early Asian trade on Monday as OPEC+ considers cutting output of up to 1 million barrels per day at a meeting this week to support the market.

Brent crude futures rebounded $2.82, or 3.3%, to $87.96 a barrel by 2337 GMT after settling down 0.6% on Friday. U.S. West Texas Intermediate crude was at $82.09 a barrel, up $2.60, or 3.3%, following a 2.1% loss in the previous session.

Oil prices have tumbled for four straight months since June as Covid-19 lockdowns in top energy consumer China hurt demand while rising interest rates and a surging U.S. dollar weighed on global financial markets.

To support prices, the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, are considering an output cut of 0.5 million to 1 million bpd ahead of Wednesday's meeting, OPEC+ sources told Reuters.

This will be the group's second consecutive monthly cut after it reduced output by 100,000 bpd last month.

"Anything less than 500kb/d would be shrugged off by the market. Therefore, we see a significant chance of a cut as large as 1mb/d," ANZ analysts said in a note.