OPEC Head: Uncertainty Over Demand, Global Economy are the Reasons for the Cut, Not Politics

OPEC's Secretary-General Haitham al-Ghais (EPA)
OPEC's Secretary-General Haitham al-Ghais (EPA)
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OPEC Head: Uncertainty Over Demand, Global Economy are the Reasons for the Cut, Not Politics

OPEC's Secretary-General Haitham al-Ghais (EPA)
OPEC's Secretary-General Haitham al-Ghais (EPA)

The reduction in oil production targets more spare capacity in case of any global emergency, OPEC's Secretary-General Haitham al-Ghais has announced.

The 13 members of the Organization of the Petroleum Exporting Countries (OPEC) and 11 of its allies led by Russia, known as OPEC+, agreed on Wednesday to lower their production by two million barrels per day.

Saudi Arabia said the reduction was necessary to respond to the West's interest rate hike and the weak global economy. The United States criticized the decision, and the White House said it indicated that the group "is aligning with Russia."

High energy prices are a significant issue in the US when President Joe Biden faces the congressional midterms next month.

Ghais told Al Arabiya TV that OPEC's latest decision "was not a decision from one country against another, and I want to be clear in saying this, and it's not a decision from two or three countries against a group of other countries."

He explained there are solid indicators for "the likelihood of recession," and the group decided "to pre-empt and to be proactive."

Western nations worry higher energy prices will hurt the fragile global economy and hinder efforts to deprive Moscow of oil revenue following its invasion of Ukraine.

European Union sanctions on Russian crude and oil products are also set to take effect in December and February, respectively.

Asked about the sanctions and a European proposal to cap the price of Russian oil, Ghais said he could not comment on the matter.

"The truth is, the shape of these proposed sanctions is not quite clear, and how they will be implemented is also unclear, so we cannot comment."

The Sec-Gen also said OPEC+ does not target prices: "We are not targeting a price. We are targeting a balance in supply and demand."

Oil prices rose on Friday, heading for gains for the second week in a row, supported by OPEC's decision for the most significant supply cut since 2020, despite concerns about recession and high-interest rates.

Brent crude rose 89 cents, or 0.94 percent, to $95.31 a barrel. US West Texas Intermediate crude futures climbed 90 cents, or 1.02 percent, to $89.35 a barrel.

Stephen Brennock of oil broker PVM said that among the critical ramifications of OPEC's latest cut is a likely return of $100 oil, noting that the gains will be limited in light of the growing unfavorable economic factors.

Both contracts posted their second straight weekly gains and their most significant weekly percentage gains since March this week, with Brent close on recording an eight percent increase this week.

However, it is still significantly lower after approaching an all-time high of $147 a barrel in March after Russia invaded Ukraine.

The dollar's rise added to pressure on oil prices amid statements from Federal Reserve officials indicating that the bank will continue to tighten monetary policy sharply.

In France, the Minister of Transport Clement Beaune said on Friday that the government was prepared to make further use of strategic reserves at the weekend to ease the tensions.

Beaune told channel LCI that he would allow fuel trucks to deliver shipments on Sundays to ease market shortages.

Most urban petrol stations in France appeared to be affected by shortages leading to long queues at gas stations.

Labor strife has hit the country's two biggest refineries in Normandy, run by TotalEnergies SE and Exxon Mobil Corp, which affected two-thirds of the country's oil production.

He indicated that the companies and workers are in negotiations, adding that the government is doing everything possible to ease the situation, especially in the most affected regions.



Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)
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Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)

Iraq produces more than 5 million barrels of oil per day (bpd), Oil Minister Basim Mohammed told state news agency INA on Saturday.

According to Reuters, Iraq is pushing for a higher OPEC production quota as the economic fallout from the Iran war and new investment by oil majors increase pressure on Baghdad to boost output, potentially putting it at odds with the producer group.

The conflict has hit Iraq particularly hard, forcing major export cuts and depriving the state of oil revenue, which accounted for 88% of government income last year.


IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
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IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)

Central bankers around the world would need to consider any slowdown in AI-driven growth as they assess steps in their fight against inflation, International Monetary Fund Managing Director Kristalina Georgieva said on Friday.

Georgieva said concerns about dependence on the AI investment boom and high valuations were impacting markets around the world.

"Things are going up and down, and this is likely to continue," she told an audience at IMF headquarters in Washington, adding that the volatility would complicate the job of central banks at a time when risks to price stability had been growing.

A steep rout in technology stocks on Thursday rippled through markets on fears that ⁠the Democrats' victory ⁠in the US midterm elections would increase regulatory scrutiny of AI and slow the data center build-out, sending investors to the safety of bonds.

The political jitters are hitting an AI trade already on shaky footing due to worry about return on massive spending on AI-related infrastructure, with the meltdown spurring margin calls and spooking retail investors and hedge ⁠funds alike.

Georgieva said the AI investment boom was lifting growth in some countries, helping to offset a negative oil-supply shock triggered by the war in the Middle East, but it was also adding to inflationary pressures and financial stability concerns.

The IMF last month flagged significant growth and financial stability risks from a potential ending of the AI investment boom, among other factors, including a prolonged Middle East war. At the time, it warned that a steep drop in AI investment could lead to a sharp fall in asset prices, ultimately cutting global GDP ⁠by 1.1% ⁠by 2028, including a 1.8% drop in US output.

Georgieva did not repeat the downside forecast on Friday, but acknowledged the recent market volatility.

"Should there be a slowdown in the AI-driven growth impulse, it would need to be factored in as central banks assess the necessary steps in the fight against stubborn inflation," she said.

Democrats are planning to unleash a flood of new legislation targeting artificial intelligence systems and data-center development when they take control of the US Congress in January, Reuters reported on Friday, citing congressional aides and advocates.

That would mark a sharp shift from the Republican-led Congress, where lawmakers largely focused on promoting AI development and declined to pass legislation restricting the technology.


World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
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World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)

World food prices edged lower in October as weaker import demand contributed to monthly declines in cereal, dairy and meat prices, but were still nearly 6% higher than a year earlier, the United Nations' Food and Agriculture Organization said on Friday.

The FAO Food Price Index, which tracks monthly changes in international prices for a basket of food commodities, ‌averaged 133.9 points ‌in October, down from a revised ‌135.6 ⁠in September.

The index ⁠was 5.9% higher than a year earlier, but remained 16.4% below its March 2022 peak.

FAO's cereal price index fell 4.5% from September and was 12.6% lower than a year ago, as wheat and maize quotations declined. Wheat prices eased on weak import demand ⁠and improved production prospects, especially in Argentina.

"Expectations of ‌easing constraints on Black ‌Sea export flows added to the downward pressure on prices, ‌although continued disruptions to Black Sea logistics limited the decline," ‌FAO said in a statement.

Maize prices also eased after reaching a three-year high in September, pressured by the US harvest, expectations of ample supplies in South America and renewed ‌prospects of easing tensions in the Black Sea region.

Vegetable oil prices edged up 0.3%, ⁠as ⁠higher soybean and sunflower oil prices more than offset a fall in rapeseed oil prices.

Sugar prices rose 6.6%, their fourth straight monthly increase, to the highest level since December 2024, after rainfall disrupted harvesting in Brazil. They were now 28.8% above a year ago.

The dairy index fell 1.1%, as lower butter and cheese prices linked to ample supplies and subdued demand outweighed gains in milk powder.

The meat index declined 1.2%, while still slightly above its year-earlier level, as ovine and bovine meat prices fell.