Saudi Arabia said it would voluntarily cut its oil production by another 1 million barrels daily next month in a bid to prop up global oil prices.
Benchmark oil prices rallied before falling back.
One other member of the cartel, the UAE, was allowed to actually increase its output by about 200,000 BPD, while several others got their production quotas adjusted, such as Nigeria and Angola that consistently failed to reach their assigned quotas for various reasons.
At the same time, the meeting unsurprisingly agreed to extend current production cuts of 3.66 million bpd until the end of this year and reduce combined production by another 1.4 million BPD from the start of 2024.
It is a clear signal to the market that OPEC+ is willing to objectively obtain an energy price that makes sense for them.
“We want to just ice the cake with what we have done,” the Saudi energy minister said. “We will do whatever is necessary to bring stability to this market.”
He called Saudi Arabia’s additional cut “a Saudi lollipop” for the rest of OPEC+, since thanks to that cut the other members would not have to make deeper cuts to their production.
This cut will bring Saudi output to some 9 million barrels daily, as it comes on top of another voluntary cut of half a million barrels daily, implemented just earlier this year.
It is a clear signal that they want to achieve, as they say, ‘market stability’ for their sector.
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