On Monday, Saudi Energy Minister Abdulaziz bin Salman said that OPEC+'s latest agreement to cut oil production could "absolutely" continue beyond the first quarter if needed. He also pledged to implement the full implementation of production reduction measures.
Saudi Arabia's energy minister said the production cuts announced last week were more than 2 million barrels per day — about half of which came from Saudi ArabiaThe withdrawal will only take into account market conditions and apply a "phased approach".
Last week, OPEC+ reached an agreement on oil**. OPEC+ agreed to further cuts** by more than 1 million barrels per day. At the same time, Saudi Arabia will extend its existing additional voluntary production cuts by 1 million barrels per day. After the news came out, oil prices extended their intraday gains to 2%, but the trend reversed sharply during the day, turning down intraday and falling by more than 3%.
For OPEC+ to expand production cuts, oil prices did not rise but fell, and the analysis believes that the reasons include: the production cut has been priced in by the market;Since the cuts are voluntary, the market fears that they will not be strictly enforced;OPEC+'s new additional 1 million barrels per day (bpd) cuts could be half as effective as that.
Saudi Arabia's energy minister said the skeptics would be proven wrong. "Honestly, I believe that this 2.2 million barrel cut will be realized. I believe the 2.2 million barrel cut will resist the inventory build-up that typically occurs in the first quarter. There are already signs that demand is improving. ”
The speech of Saudi Arabia's energy minister once drove oil prices back to 74 on Monday$18, but since then the WTI*** decline has reextended to 07% at 73$55 barrel. In the end, WTI closed down 103 US dollars, down 139% to 73$04 barrel. Brent closed down 0$85, down 108% to 78$03 barrel.
One of the problems that OPEC+ is currently facing is Russia. Russia has mainly boosted oil prices through export restrictions, rather than directly cutting production as other OPEC+ members have done.
Last week, Russian Deputy Prime Minister Alexander Novak said that Russia would step up voluntary cuts in oil exports in the first quarter of 2024. By then, the cut in Russian oil exports will reach 500,000 barrels per day. Among them, exports were cut by 300,000 barrels per day, and fuel exports were cut by 200,000 barrels per day.
Saudi Arabia's energy minister said he would have preferred to see production cut but could not convince Russia. "We did try. We also know that it will be extremely difficult for Russia to reduce production in winter. "Russia has long said that cold weather and other geographical conditions make it more difficult to control production in the first few months of the year.
Saudi Arabia said that while Russia may not cut production, it is imposing export restrictions. If Russia fails to deliver on its promises, as it did earlier this year, it will remain transparent and promise to make amends. "We believe in them. I believe that everything they do is by the rules. ”
Saudi Arabia noted that it is equally important for Russia to gain the trust of the market, which requires external verification. "That's what we've always said to them: it's not that we believe in you that matters, it's the market, the second-hand tanker trackers, you have to communicate with them, you have to work with them. ”
At the moment, Saudi Arabia is doing its best to rebalance the oil market, cutting production more than any of its allies. Saudi Energy Minister highlighted the level of trust between Saudi Arabia and Russia, which is crucial for OPEC+.
Saudi Arabia's energy minister also said he shares the same confidence in the UAE, the Gulf's main ally. Asked about the UAE's implementation of the OPEC+ production cut deal, he said: "If we think they are not doing what they should do, we will not have reached this agreement." ”
The UAE will voluntarily cut oil production by 16 in the first quarter of next year30,000 barrels per day. In fact, the UAE is reluctant to cut production. Previously, the country was given the power to increase production slightly at the OPEC+ meeting in June, which could increase production capacity by 200,000 barrels per day from January next year in order to put its new capacity investment to use.
Wall Street news, welcome **app to see more.