OPEC decided to maintain its production cut target

The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers recently held the 34th ministerial meeting by video, deciding to maintain the production reduction target
set in early October.

Observers pointed out that the decision of major oil producers to continue to cut production shows that they have a strong
intention to "protect prices".
At a time when Western countries are setting a price ceiling on Russian seaborne oil exports, major oil producers are holding a wait-and-see attitude and will continue to assess the impact
of Western prices on Russian oil prices and changes in market demand.

Major oil-producing countries held a meeting on the 4th and issued a statement saying that the production reduction plan in early October was "purely for market considerations" and "later considered by market participants to be a necessary and correct move to stabilize the global oil market"
.
The statement also stressed that oil producers stand ready to meet and take additional measures "to support the balance and stability of the crude oil market if necessary.
"

The price of the main contract for New York crude futures fell from more than $120 a barrel in June to around $80 a barrel now
, as the market worried that slowing world economic growth was dragging down demand.
London Brent crude oil futures prices showed a similar trend
.

In September, major oil producers announced their first monthly output cut after more than a year, lowering their monthly output by 100,000 barrels per day in October.
In early October, it announced that it would reduce monthly production by 2 million barrels
per day from August production from November.

From the perspective of international oil price trends, the effect of large production cuts in oil-producing countries is not obvious
.
International oil prices have continued to fluctuate downward
since November.
In its November monthly oil market report, OPEC explained that widespread high inflation, tightening monetary policy by major central banks, high debt levels in many economies, tighter labor markets and continued constraints in supply chains have increased world economic uncertainty, while geopolitical uncertainty and weak economic activity have dampened demand
.

Juliana Geiger, an analyst at the British Oil Price Network, pointed out that because the actual output of some oil-producing countries is already below their production quotas, the actual production reduction is expected to be about half of the nominal production cut, and the boost to oil prices is naturally limited
.

At present, major oil-producing countries are very sensitive
to market demand.
Sheikh Nawaf Al-Sabah, CEO of Kuwait Oil Company, believes that crude oil demand will either remain unchanged or decrease
next year.

Analysts pointed out that the current international market is facing huge geopolitical risks, and bearish and positive factors are intertwined, and major oil-producing countries hope to "keep a low profile" and are still waiting to assess changes
in market demand.

The meeting comes at a time
when the European Union and the G7 have decided to set a cap on Russian oil exports.
Russia previously warned that it would not supply oil and petroleum products to countries that imposed price restrictions on Russian oil, which triggered market concerns that Russia's sharp production cuts would lead to market supply cuts, which boosted oil price bullishism
.

The US "Politico" media company reported that Russia may find a new buyer for its crude oil originally transported by sea to the EU, but no one underestimates the risk that Russia may fight back violently, that is, reduce production and exports to push up global oil prices and hurt rival economies
.

In addition, according to the US Energy Information Administration, the United States has released more than 200 million barrels of strategic petroleum reserves this year, reducing its strategic petroleum reserve inventory to the lowest
level in nearly 40 years.
The large-scale release of reserves in the United States may come to an end, which also supports oil prices
.

However, the effect and impact of the US and European price limits remain to be seen, especially the Russian crude oil price ceiling is higher than previously expected, which actually eases the concerns
of some investors.

Tang Tianbo, associate researcher of the Middle East Institute of the China Institute of Contemporary International Relations, pointed out that the $60 ceiling is very close to Russia's current export crude oil price, and the subsequent impact on international oil prices depends on the landing and implementation
of relevant measures.

Craig Elram, a market analyst at U.
S.
foreign exchange broker Chubb Corporation, expects an increased
risk of large fluctuations in crude oil prices in the near future.

Amrita Sen, research director of Energy Vision Consulting, believes that there are huge unknowns in the current international crude oil market, so it is prudent for major oil-producing countries to maintain policy stability rather than increase market volatility
.
Major oil producers are expected to take action to increase or decrease supply
, if needed.