RIYADH: Oil prices jumped $3 a barrel on Monday as the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, considered reducing output by more than 1 million barrels per day to buttress prices with what would be its biggest cut since the start of the COVID-19 pandemic. Brent crude futures for December delivery rose $2.99 to $88.13 a barrel, a 3.5 percent gain, by 12:50 p.m. ET (1650 GMT). US West Texas Intermediate crude rose $3.33, or 4.2 percent, to $82.82 a barrel. Citing OPEC+ sources, Reuters reported that the organization is planning an output cut of more than 1 million bpd ahead of its meeting in Vienna on Oct.05 to decide on the next phase of the production policy. It should be also noted that the upcoming meeting on Wednesday will be the first in-person meeting of OPEC ministers since 2020, which clearly indicates its significance. If the meeting agrees to the output cut, it will be the organization’s second consecutive monthly cut after reducing output by 100,000 bpd last month. “If OPEC+ does decide to cut output in the near term, the resultant increase in OPEC+ spare capacity will likely put more downward pressure on long-dated prices,” energy consultancy FGE said in a note, as reported by Reuters. Meanwhile, Goldman Sachs, on Sept. 28 had cut its 2023 oil price forecast due to expectations of weaker demand and a stronger US dollar. Analysts at Goldman Sachs now see Brent crude averaging $100 a barrel from October to December and $108 a barrel in 2023, down from the previous prediction of $125 for both time periods. Post the Ukraine conflict, oil prices had rallied to over $120 a barrel, as the western allies led by the US and EU weaned themselves from Russian oil imports. Oil prices, however, have been tumbling since July, as the pandemic lockdown in China negatively impacted the demand, along with a surging US dollar weighed on global financial markets. Goldman Sachs said a production cut under consideration by OPEC+ was justified by the sharp decline in oil prices from recent highs and supported its bullish view. “We reiterate both our bullish oil view as well as our preference for long crude timespread positions into year-end,” the bank’s commodities research division wrote in note on Monday. Despite one of the tightest markets in recorded history, Goldman said the cut could be justified by the 40 percent decline in prices from their June peak and enabled by the lack of supply elasticity, given slowing shale activity and exhausted spare capacity. “The collapse in investor participation, driving liquidity and prices lower, is also a likely strong catalyst for such a cut, as it would increase the carry in oil and start to claw back investors who have instead turned to USD cash allocation following the aggressive Fed hikes.”