The energy game continues.
After the OPEC+ meeting, the price of US oil futures once rose to 88 US dollars/barrel on Thursday, and the price of crude oil futures also rose to 94 US dollars/barrel. The cumulative increase this week was around 10%.
At this meeting, OPEC+ will cut production by 2 million b/d from November 2022 based on the August 2022 production plan. This is the biggest reduction in production since the outbreak in early 2020, equivalent to about 2% of global oil demand, and the validity period may be extended until December 31, 2023.
Judging from the data provided by OPEC+, OPEC member countries may cut production by 1,273 million b/d, from the August production plan of 26.689 million b/d to 25.416 million b/d; non-OPEC member countries may cut production by 727,000 b/d, from the August production plan of 17.167,000 b/d to 16.44 million b/d, as shown in the chart below.
In fact, due to the slow pace of development of projects after the pandemic, the actual production of many member countries may not have reached the level of production plans, so although the extent of production cuts seems astonishing, the actual results may not be the case, the impact may be mainly on an ideological level — the signals released by the OPEC+ meeting are disrupting capital markets and investment sentiment.
How big is the impact
The background of this conference includes: 1) oil prices have fallen by nearly 30% from a mid-year high; 2) Europe, which has fallen into an energy crisis, “Winter has arrived”; 3) the US midterm elections are not far away, and under political and economic pressure from inflation, or...