6 October 2022 | Other

Oil continues to rise as OPEC+ countries cut production

Following decision OPEC+' to cut oil supplies even further in the context of an agreement to cut production by about 2 million bpd, oil prices continued to rise.

Now the supply of oil has been reduced, the decision made, in turn, will worsen the situation, which will lead to higher inflation.

Abdulaziz bin Salman, Saudi Arabia's energy minister, said the supply cuts are a reaction to rising interest rates in the Western countries and the worldwide weakening of the economy, and will actually reach about 1-1.1 million bpd.

Citi analysts said in a note that the impact of the decision on the market depends on the length of time the agreement is in place. For now, OPEC+ has extended its Declaration of Cooperation until the end of 2023. Analysts also added that the reduction in supply will keep the level of global stocks longer.

According to the statement of the Energy Information Administration, last week's decline in U.S. oil inventories also supported prices; crude oil reserves fell 1.4 million barrels in the week to September 30, to 429.2 million barrels.

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