Oil-producing countries have obvious intention to stabilize prices, and the resistance to the decline in international oil prices has increased

With the significant decline in international oil prices in recent weeks, the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers decided on the 5th to cut production slightly in October, reducing monthly production by 100,000 barrels
per day.
Analysts believe that although the scale of production cuts is not large, oil-producing countries have released a clear intention to maintain oil price stability, and the resistance to further decline in international oil prices has increased
.

Recently, the prices of the main contracts for New York's West Texas Light crude oil and London Brent crude oil futures have fallen to the level before the outbreak of the Ukraine crisis, and continue to decline
.
New York crude futures have fallen back after reaching a recent high of $122.
11 a barrel on June 8 and have now fallen below
$87 a barrel.

The significant drop in oil prices is undoubtedly bad for oil-producing countries that rely on crude oil exports, and OPEC has repeatedly emphasized its policy goal
of maintaining stability in the oil market.

OPEC issued an announcement on the 5th, saying that the ministerial meeting between OPEC and non-OPEC oil producers held on the same day noted the negative impact of the current market volatility and liquidity decline, as well as the need to support market stability and operational efficiency, so it required continuous assessment of market conditions and was ready to make rapid adjustments
to production in different ways as needed.

UBS Group said on the 6th that although the average production reduction of 100,000 barrels per day is insignificant compared with the global average daily demand of 100 million barrels, the message of this decision is that OPEC and non-OPEC oil producers will defend oil prices
.
Giovanni Staunovo, an oil analyst at the group, said the decision to cut production showed producers were eager to keep oil prices above
$90 a barrel.

Bill Fallon-Price, head of the macro research team at Enverus, the UK's energy service, said that while the cuts were irrelevant in terms of scale, they signaled that OPEC and non-OPEC producers were back in price watch mode
.

Analysts pointed out that at present, the factors driving up oil prices include Europe's energy supply difficulties pushing up the demand for oil as an alternative fuel, and the Organization for Economic Cooperation and Development members will end the release of strategic crude oil reserves
.
At the same time, the interest rate hike of European and American central banks has triggered concerns about economic growth and oil demand, and the delay of the new crown epidemic and other negative factors for oil prices cannot be ignored
.

Multiple uncertainties mean that oil prices may remain range-bound by the end of this year
.
However, the intention of OPEC and non-OPEC producers to stabilize oil prices suggests that oil prices may face resistance if they continue to fall significantly
.

Francisco Blanche, head of commodity and derivatives research at Bank of America, said recently that major oil producers need to deal with major supply and demand risks in the oil market at the same time, and these risks may drive oil prices up and down by $5 to $20 per barrel in the coming months
.
Blanche expects Brent crude futures to be $100 per barrel in 2023
.

UBS expects Brent crude futures to be around $125 a barrel by the end of the year
.