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 (OPEC) and its allies, known collectively as OPEC+, is considering an output cut of more than 1 million bpd ahead of Wednesday’s meeting, OPEC+ sources told Reuters.
If agreed, it will be the group’s second consecutive monthly cut after reducing output by 100,000 bpd last month.
OPEC+ missed its production targets by nearly 3 million bpd in July, two sources from the producer group said, as sanctions on some members and low investment by others stymied its ability to raise output.
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.