Author丨Peng Qiang
Edit丨Zhang Weixian
Picture Source丨TuChong
Oil-producing countries decided to reduce production, which triggered market concerns about tightening supply. International oil prices rose for five consecutive trading days.
As of the close of October 8, Beijing time, the WTI crude oil futures price for delivery in November rose 4.74%, closing at US$92.64/barrel; the Brent crude oil futures price for delivery in December rose 3.71%, closing at US$97.92/barrel.
So far, stimulated by the news of the OPEC+ organization's sharp production cuts, international oil prices have risen for five consecutive trading days this week, and have set the largest single-week increase since March this year: WTI crude oil rose from below US$80 per barrel to above US$90 per barrel, with a cumulative increase of 16.5%, and Brent oil has also increased by more than 10%.
On October 5th local time, the Organization of Petroleum Exporting Countries and its Allies of Oil Producing Countries (OPEC+) held a ministerial meeting on Vienna , and decided to reduce the organization's oil production by 2 million barrels per day from November 2022. Affected by this news, international oil prices have continued to rise.
On October 7, Haitham al-Ghais, Secretary-General of the Organization of Petroleum Exporting Countries, said in an interview that the production cut target reached by OPEC+ oil-producing countries will help them release more supplies in the event of a crisis. Saudi Arabia Energy Minister previously stated that OPEC+ organization of production cuts is a necessary measure to deal with the sharp rate hikes in many European and American countries and the weak global economy.
After OPEC+ decided to cut production, the U.S. government criticized the oil-producing countries for their move as short-sighted and disappointing. In order to calm market volatility, the White House said it will continue to release strategic crude oil reserves.
The US Department of Energy issued an announcement on its official website on October 7, stating that it has sold 10.15 million barrels of strategic oil reserves to eight companies including Marathon Oil and Equinor. The release of strategic oil reserves is part of the 180 million barrels of oil reserve plan previously announced by US President Biden , and the delivery of crude oil products will start from November. Francisco Blanch, head of global commodity and derivatives research at Bank of America Global Commodity and derivatives, said that after OPEC+'s sharp production cuts, the White House has no longer had many remaining options to curb higher oil prices and its impact on consumers. In the long run, releasing crude oil reserves will strengthen OPEC+'s leadership in the global crude oil market.
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Editor of this issue Liu Xiang Intern Mei Lexuan
