OPEC Unexpectedly Cuts Production, Oil Prices Soar 4%!

OPEC+ representatives said on Monday that the group will cut output by 100,000 barrels per day from October to bring supply back to August levels to stabilize oil prices amid escalating concerns about economic weakness and slowing demand .

This would overturn OPEC+’s previously announced September production increase plan, leaving Biden’s Middle East crude diplomacy to zero. After the news was released, international oil prices continued their upward trend and continued to climb. Brent crude oil exceeded US$96 per barrel, an intraday increase of more than 3.7%.

Concerns about a weakening economy and slowing demand hung over the meeting. International oil prices have just experienced the longest decline since 2020, with Brent crude falling from $120 a barrel in June to about $95 a barrel, a three-month drop of more than 20%.

Regarding the decision of OPEC+ to cut production, industry insiders said that this is a very clear attitude. Oil exporting countries are unwilling to let oil prices fall further, so they made the decision to cut production. The OPEC meeting in September is a very important turning point. OPEC has changed from the previous slow production increase to keep the supply tight to maintain a strong oil price to the need to reduce production to maintain the situation, which also means a change in the crude oil market pattern.