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by Stockwatch Business Reporter

West Texas Intermediate crude for November delivery added $4.14 to $83.63 on the New York Merc, while Brent for December added $3.72 to $88.86 (all figures in this para U.S.). Western Canadian Select traded at a discount of $23.70 to WTI, down from a discount of $22.00. Natural gas for November lost 30 cents to $6.47. The TSX energy index added 12.45 points to close at 227.74.

Oil prices kicked off the quarter with a jump, amid rumours that OPEC+ is considering a sizable production cut at its meeting this Wednesday. Reuters and others reported over the weekend that the group is mulling a cut of one million barrels a day or perhaps even more. This would be the largest cut since the start of the pandemic in early 2020.

Oil bulls liked the rumours. In a research note entitled "OPEC takes on the Fed," the analysts at Goldman Sachs suggested that a cut could help reverse the "collapse in investor participation ... [and] claw back investors who have turned to U.S.-dollar cash allocation following the aggressive Fed [interest rate] hikes." While slashing output may seem counterintuitive given historically tight oil supplies, the tightness has not stopped oil prices from sliding 40 per cent since June, pointed out the analysts. They blamed recession fears. A production cut from OPEC would "reinforce our bullish price view while help[ing] limit the downside ... should economic growth disappoint."

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