Ahead of OPEC+ meeting today, crude oil price rose yesterday to above $90 per barrel after falling on Monday to $88 per barrel. The rise, market sources said, is not unconnected with the possibility of a possible massive cut in the production quota which the organisation may impose. As at press time, the Brent crude traded at $92 per barrel, while the West Texas Intermediate (WTI) traded at $86.43 per barrel.

Today’s meeting will be crucial for the future of oil given that despite the growing worry of a severe global recession and the impact that it would have on oil demand, the OPEC+ group feels that the markets are largely ignoring market fundamentals. Nevertheless, OPEC+ is considering a hefty production cut-an even heftier one that it was reportedly considering previously.  For instance, it is being touted that the oil group may be considering a massive two million barrels per day cut in production.

The meeting, which will discuss oil production plans for November, will also present an avenue to assess the state of the oil markets-and the current state of oil prices which began to fall in June near levels that some OPEC+ members could find unacceptable.

Aside from current oil prices, another factor in determining OPEC+’s production plans for November is the group’s available spare capacity-without which the group would be unable to control the market in the future.

An output cut of that magnitude (two million bpd) would come shortly after the United States ends its one million bpd release of crude oil from its emergency stockpiles. Crude oil prices have risen over the last few days on the prospect of such an output cut, with Brent now trading above $91.

Late last week, news of Russia pushing OPEC+ to implement a one million bpd production cut made the rounds. The group was later reportedly considering a production cut between 500,000 bpd and one million bpd. Shortly after, yet another source said that OPEC+ was considering an even larger cut of more than 1 million bpd. The latest news from OPEC+ delegates suggests that the group is considering yet another option: a two million bpd cut.