OPEC cuts 2022, 2023 oil demand growth view as economy slows<\/a><\/strong><\/em><\/p>\nAs a result, Goldman Sachs lowered its end-2023 production forecast for OPEC+ by 1.1 million bpd and raised its Brent price forecasts to $95 and $100 a barrel for 2023 and 2024, respectively, its analysts said in a note.<\/p>\n
Goldman estimated the output reduction could provide a 7% boost to oil prices, contributing to higher Saudi and OPEC+ oil revenues.<\/p>\n
The Biden administration said it saw the OPEC oil cuts as unwise.<\/p>\n
Some analysts questioned the rationale for the extra production cut by OPEC+.<\/p>\n
“It’s hard to buy the ‘pre-emptive’ and ‘precautionary’ reasoning – especially now when the banking crisis had tailed off and Brent had crawled back up towards $80 from its 15-month lows earlier in March,” Vandana Hari, founder of oil market analysis provider Vanda Insights, said.<\/p>\n
Last month, Brent fell towards $70 a barrel, the lowest in 15 months, on concern that a global banking crisis and rising interest rates would hit demand despite lower OPEC oil output in March due to oilfield maintenance in Angola and a halt in some of Iraq’s exports.<\/p>\n
“Today’s move, like the October cut, can be read as another clear signal that Saudi Arabia and its OPEC partners will seek to short circuit further macro sell-offs and that Jay [Jerome] Powell is not the only central banker that matters,” RBC Capital analyst Helima Croft said.<\/p>\n
“The bottom line is Washington and Riyadh simply have different price targets for their key policy initiatives.”<\/p>\n
Analysts at JP Morgan said the move came later than they had expected and the slow response to weaker prices would have a limited impact on overall balances and could delay the price impact.<\/p>\n
“Since November our global oil supply-demand balance suggested a strong policy action was needed to keep global oil surpluses in check,” they said.<\/p>\n
Meanwhile, US crude production rose in January to 12.46 million barrels per day (bpd), the highest since March 2020, Energy Information Administration (EIA) data showed on Friday.<\/p>\n","protected":false},"excerpt":{"rendered":"
OPEC+ surprise output cuts lift oil prices by $5 per barrel. Oil prices surged on Monday, jolted by a surprise announcement by OPEC+ to cut production further in what top producer Saudi Arabia called a precautionary measure to support market stability. Brent crude traded at $84.26 a barrel by 0347 GMT, up $4.37, or 5.5% […]<\/p>\n","protected":false},"author":8,"featured_media":15204,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[7066,6362,1968,181],"class_list":["post-15203","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-jp-morgan","tag-opec","tag-riyadh","tag-washington"],"_links":{"self":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/15203","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/comments?post=15203"}],"version-history":[{"count":0,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/15203\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media\/15204"}],"wp:attachment":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media?parent=15203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/categories?post=15203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/tags?post=15203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}