OPEC+ cut production for the first time in more than a year! Saudi Arabia: Proactive action will be taken to manage the global oil market

Saudi Arabia, the main producer of OPEC+, said that the organization cut oil supply for the first time in more than a year, indicating that it is serious about managing the global oil market and is willing to take pre-emptive action
.

OPEC+ said on Monday it would cut production by 100,000 bpd in October, returning supply to August levels
.
In the final communiqué after Monday's meeting, the organization also stressed its readiness to convene another ministerial meeting at any time, if needed, to address market development issues
.

Saudi Energy Minister Abdulaziz bin Salman said on Monday: "This decision is an expression of will and we will use all the tools
.
" "This simple adjustment shows that we will remain focused, preemptive and proactive in supporting the stable and effective operation of the market for the benefit of market participants and the industry
.
"

The OPEC+ cut completely reversed the September increase and came as a surprise to many traders who had expected OPEC+ to keep oil production stable as oil prices above $90 a barrel weighed on consumer demand
.
With the EU imposing sanctions on Russian oil, market supply appears to be more strained
in the coming months.

This could be a worrying move for consumer countries as they grapple with inflationary pressures from rising oil prices to $95 a barrel and the prospect
of a winter energy crisis.
However, OPEC+ is also facing concerns about demand intensity starting to outweigh markets that are worried about supply, and crude oil futures have fallen by about 20% in the past three months, threatened by a global economic slowdown, which is not a good thing
for Saudi Arabia and other oil producers.

Bill Farren-Price, head of macro oil and gas research at energy consultancy Enverus, said the OPEC+ production cut was "intended to send a signal that the group is back in price observation mode" and that the group may believe the move "will be enough to organize any short-seller.
"

Brent crude oil futures rose as high as 4.
3 percent in November after news of OPEC+ production cuts, eventually closing up 2.
92 percent at $95.
74 a barrel
on Monday.

Two weeks ago, Saudi Arabia warned that it would take action to support oil prices
.
Abdel-Aziz bin Salman noted at the time that "extreme" volatility and lack of liquidity meant that the crude oil futures market was increasingly disconnected from fundamentals; He said crude oil futures prices do not reflect potential supply and demand fundamentals, which could require OPEC+ to cut production when it meets in September to consider production targets
.
This proposal has broad support
from other OPEC+ member states.

At the same time, OPEC+ also needs to deal with the possibility of more Iranian oil entering the
market.
If the Iranian nuclear negotiations progress and Iranian oil enters the market, supply may be boosted; If sanctions on Iran are relaxed, Iran is expected to increase its oil supply by 1 million barrels per day (1% of global demand).

However, it is worth mentioning that last Friday's news showed that the prospects for a nuclear negotiation agreement are uncertain
.