Many market participants said that OPEC+ may further reduce oil production

Recently, some market participants said that in the context of the turmoil in the global oil market, the OPEC+ alliance of OPEC members and non-OPEC producers may further restrict oil supply
.

Of the 16 traders and analysts polled by the media this week, 10 expect OPEC to announce new production cuts
.
Among them, Matt Smith, leading oil analyst at KPLER Americas, said that the market rumors that OPEC+ has the idea
of further production cuts.
Phil Flynn, senior market analyst at Price Futures Group, said oil inventories are still near historic lows, which is likely to increase the probability
of OPEC production cuts.
Rebecca Babin, a senior energy trader at CIBC Private Wealth Management, believes that the probability of OPEC+ introducing more production cuts has increased
.
Both New York oil prices and Brent crude futures price structures have shifted from front-month contracts premiums to discounts, giving OPEC+ further confirmation of current weak demand and the need for action
.
Babin said the probability of further OPEC+ cuts by 500,000 b/d could reach 60 percent, compared with a 40 percent
chance of keeping production quotas unchanged.
Amri Tasen, co-founder and chief oil analyst at Aspects Ltd.
, also believes the group will cut production further because "they are very sensitive in keeping supply and demand in the crude oil market balanced.
"

Given the overall market conditions, Eurasia Group analyst Grant Smith stressed that whether the production cuts are realized depends mainly on the trajectory of oil prices at the time of the OPEC+ meeting and the expected
damage to the market after the EU imposes sanctions.
According to the International Energy Agency, Russia's production will fall by 15%
early next year after the European Union banned Russian crude oil exports by sea.

At present, OPEC and OPEC+ are more enthusiastic about reducing production and protecting prices, and the possibility of further production cuts is high
.
Saudi Energy Minister Abdelaziz bin Salman previously categorically denied recent discussions among major oil producers to increase oil production, stressing that the production cuts will continue until the end of
next year.
Saudi media quoted Abdulaziz as saying in the report that OPEC+ will not discuss oil production, and the plan of major oil producers to cut production by an average of 2 million barrels per day will continue until the end of
2023.
He also said major producers stand ready to intervene
if measures such as further production cuts are needed to balance supply and demand.
Other OPEC+ representatives also said the group may opt for further production cuts, but internal discussions have not yet officially begun
.

Earlier, OPEC+ announced on October 5 that it would cut production sharply from November to 2 million barrels
per day from the average production in August, in view of the uncertainty facing the global economy, the oil market and the need for stronger long-term guidance for the oil market.
The production cut is equivalent to 2%
of global average daily oil demand.
However, the decision to cut production at that time did not change the decline in international oil prices
.