UBS: OPEC+ supply cut is necessary to support oil prices

Analysts at the UBS Group said today, Tuesday, that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, or the bloc known as OPEC+, to reduce oil production is necessary to stop the decline in prices in light of fears of recession and the rise of the dollar.

According to “Reuters”, UBS said in a note, “The absence of a move by the coalition to withdraw barrels from the market is likely to lead to more downward pressure on oil prices.”

They added, “The coalition must announce a production cut of at least half a million barrels per day in the coming days.”

It is scheduled to meet OPEC countries, Russia and other producers within the OPEC + alliance on October 5^th.

UBS explained that crude oil prices are declining in light of fears that the recession will lead to weak demand and the availability of more supplies in the oil market, adding that prices are also affected by the general atmosphere that prefers to move away from the risks resulting from tightening monetary policy in the United States and Europe.

Oil prices rose more than one percent on Tuesday, after falling to their lowest levels in nine months the previous day, amid indications that the OPEC + alliance may announce production cuts to avoid a further collapse in prices.