- The decision by some key OPEC+ members to reduce their output by more than 1.66 million barrels per day (Mb/d) was announced one day before the JMMC meeting, which was rather an unusual step.
- OPEC+ couldn’t have watched oil prices fall towards the lows of 70 US$/bbl level without any reaction especially in the light of changing market sentiment.
- Financial institutions in particular started the year with a bullish sentiment banking on a strong rebound in Chinese oil demand. However, those forecasts were then revised downwards as the growth from China has been below expectations, in addition to the gloomy economic outlook across the western economies.
- The reaction of the White House to OPEC+’s decision was milder than the one we saw in autumn last year when the producers group decided to reduce output by 2 Mb/d, which was announced just ahead of the US mid-term elections, hence was interpreted as politically driven.
- Inflation remains elevated in major economies, supporting a continuation in central banks interest rate policy.
“Oil markets: An early peek into 2023“, Dr Carole Nakhle, Jan 2023
“OPEC+ makes shock million barrel cut“, Dr Carole Nakhle, Apr 2023
“Global Economy and Energy Markets Weekly Commentary – 21st Mar ‘23“, Dr Carole Nakhle, Mar 2023