September 5, OPEC decided to cut production slightly to boost world oil prices, which had previously fallen due to market concerns.
OPEC decided to cut production by 100,000 barrels per day in October, and the total production cut that month was about 3 million barrels, which is about 0.1% of global demand. In addition, OPEC said that if the international oil market prices continue to fluctuate, OPEC-led countries can hold special meetings at any time.
Benchmark Brent crude oil price has fallen from a high of $120 a barrel in June to $95 a barrel today due to the market's negative view of the economic outlook for Western countries.
Although a slight daily production cut of 100,000 barrels will not have a significant impact on global supply and demand relations, and the impact on the actual market conditions may be 0, OPEC's move is sending a signal that OPEC intends to defend crude oil prices.
Although OPEC has not clearly stated its preferred price level at present, judging from the recent remarks and actions of OPEC member states, OPEC intends to ensure that crude oil prices are above US$90 per barrel.
Previously, the technical committee of OPEC expected that the market would have an oversupply of 400,000 barrels per day this year, and then a supply shortage of about 300,000 barrels per day in 2023.
However, now that the world economy has reached the brink of a recession dominated by energy prices, OPEC's moves and attitudes are undoubtedly a sprinter on the downhill road. According to US media analysis, if the world economy falls into recession, oil prices will fall to a low of $50 per barrel within 6 months.
With the advent of winter, the world's energy situation will further deteriorate. The surge in natural gas prices also drove the price of diesel and thermal coal soaring. And soaring prices have hit Europe's energy-intensive industries and public utilities. The risk of a recession will increase further as rising costs chains pass to small businesses and ordinary families.
is not only Europe, but also the United States, Japan, South Korea and the vast number of emerging market countries are also struggling in the energy "storm".
Therefore, OPEC's intention to support oil prices at a high of $90 per barrel will become increasingly difficult to achieve, and if OPEC tries to force prices to stay at this high level by limiting supply, it will only trigger a deeper and longer world economic depression.
text | Wei Lai title | Huang Zixin review | Chen Jiali
