Saudi oil production was rumored to exceed 10 million barrels, and U.S. oil tumbled 3% to a nearly one-month low

On Thursday (October 4), U.
S.
oil fell $1.
53, or 1.
89%, to close at $79.
33 per barrel
.
Brent oil fell $1.
04, or $1.
27 a barrel, to close at $80.
95 a barrel
.
Previously, OPEC+ maintained the established pace of production increase, ignoring the call of the United States to increase the range of production, which led the market to speculate that the United States may use strategic reserves
.
Meanwhile, Saudi Arabia's oil production will soon exceed 10 million b/d for the first time since the pandemic began, weighing on oil prices
.

Saudi Arabia, along with OPEC+, along with OPEC members and their allies, agreed to stick to its original plan
to raise production by 400,000 b/d in December.
Saudi Arabia has rejected calls
for OPEC+ to accelerate an increase in oil supplies.

Sources from OPEC+ said the U.
S.
has enough capacity to boost production
if it believes the world economy needs more energy.
Saudi Arabia and Russia are increasingly convinced that higher prices will not prompt a rapid increase
in U.
S.
shale oil production.
Saudi Energy Minister Prince Abdulaziz said on Thursday that oil producers were worried about increasing production too quickly and fearing another setback
in the fight against the epidemic and economic recovery.
Oil inventories will see "huge" growth
in late 2021 and early 2022 due to slowing consumption.

Russian Deputy Prime Minister Alexander Novak said OPEC's supply to global markets has increased by 2 million b/d since August and will continue its plan
to add 400,000 b/d per month in the second half of 2021 and early 2022.
In October, oil demand in the EU showed some signs
of decline.
Global oil demand is still affected
by the Delta variant virus outbreak.

A White House spokesman said Thursday: "At a critical time in the global economic recovery, OPEC+ appears reluctant to use its existing capacity and capacity
.
" The President believes Americans deserve affordable energy, including at gas stations, and directs us to continue to monitor the market and be prepared to use all tools
when needed.
"The United States, the world's largest oil producer, saw a sharp decline in production in 2020 and since then, production has recovered much
more slowly than expected.

UBS strategist Giovanni Staunovo said in a note that Brent crude prices are expected to reach $90 per barrel in the coming months, and the market remains undersupplied
after OPEC+ decided to maintain a cautious pace of production increases.
OPEC and its allies stuck to their plans to increase production by 400,000 barrels per day in December, despite pressure from major oil consumers such as the United States and Japan to accelerate the pace of production increases
.
The OPEC+ decision could prompt the U.
S.
to release the Strategic Crude Reserve, but such a move "would only fill the gap caused by temporary production disruptions and would not address structural issues such as underinvestment and rising demand; Investors with higher risk tolerance continue to be advised to increase their holdings of longer-term Brent futures contracts, which are currently priced below the spot price
.

Goldman Sachs analyst Damien Courvalin said that the global oil market is still undersupplied, and OPEC+ is publicly arguing with the United States over crude oil production issues, and oil price volatility is expected to intensify
in the coming weeks.
Overall, maintain the bullish view
.
If the United States releases strategic reserves, it may only temporarily ease the pressure on rising prices, and it may even backfire
next year.