On Wednesday, the OPEC+ Joint Ministerial Supervisory Committee (JMMC) proposed to cut production by 2 million barrels a day. Last day, the media revealed that Saudi Arabia and Russia pushed to cut production by 1 million to 2 million barrels per day or more, and Saudi Arabia sought to push up oil prices at the OPEC+ meeting.

Driven by JMMC news, oil prices continued to rise in intraday trading, with US oil and cloth oil rising by more than 1 per cent. Oil prices rose sharply in the first two days of the week.

Ministers of oil-producing countries discussed the proposal at a meeting later on Wednesday and made a policy decision to eventually cut production by 2 million barrels a day. OPEC+ 's target is for November and December oil supplies. This is the biggest reduction in OPEC+ production since the start of the COVID-19 epidemic in 2020, when it agreed to drastically cut production.

The impact of the production reduction resolution on global crude oil supply will be less than the headline figures suggest, as several countries have already produced well below their quotas. This means that they have met the new restrictions without having to reduce production. Iran's deputy oil minister, Amir Hossein Zamaninia, said the benchmark for reducing production by 2 million barrels a day was the same as the previous OPEC+ agreement. Pro rata sharing among OPEC+ members means that only eight countries are needed to control actual productionIt is analyzed and calculated that the actual production reduction is about 880000 barrels per day.

OPEC+ said at a press conferenceOPEC+ will no longer meet on a monthly basis, and the joint ministerial oversight committee of OPEC+ will meet every two months.A representative said that OPEC+ would hold its next meeting in November.

The target set by Saudi Arabia at the OPEC+ meeting in October is to adjust oil production to 10.5 million barrels a day from November to December.

Russian Deputy Prime Minister Novak said OPEC+ agreed to strengthen the cooperation agreement until the end of 2023. In addition, he also mentioned that the oil price ceiling may cause Russia to temporarily reduce oil production.

Nigeria's oil minister said the OPEC+ wants oil prices to be around $90 a barrel and needs to take action to ensure that oil prices remain at $90.

OPEC's production cut reflects concerns among oil-producing countries about the global economic slowdown. At present, a number of central banks are rapidly tightening monetary policy to combat inflation, which has hurt the economy and led to a lack of confidence in the market. in addition, the strength of the US dollar has superimposed a strong US dollar and oil prices have fallen sharply from their highs during the year. Brent crude soared to more than $125 a barrel earlier this year after the outbreak of the conflict between Russia and Ukraine. At the end of September, it gave up all its gains since February, falling to $80. On Wednesday, cloth oil was at the level of $92.

At the previous September meeting, OPEC+ said it would cut production by 100000 b / d from October, bringing supply back to August levels, overturning the September production plan announced by OPEC+ the previous month and meaning Mr Biden's Saudi Arabia trip was zero. Last month's cut was also the group's first cut since early 2021. OPEC+ 's move was unexpected, but because of its small range, the market characterized it as a "symbolic" cut in production. The Saudi side later said that it would maintain the initiative of the oil production policy in the future.

OPEC's decision to cut production on a large scale is likely to add to the inflationary struggle driven by high energy costs in Europe and the United States.

Market participants pointed out that the OPEC+ production cut angered the United States and was beneficial to Russia.Biden sought to lower oil prices ahead of November's mid-term elections. Media said that earlier on Wednesday, U. S. officials tried to block OPEC+ production cuts.After the OPEC+ production cut was announced, Biden said there was no need for OPEC+ to cut oil production.U.S. Secretary of State Abraham Lincoln says the Biden administration is trying to ensure an effective energy supply.

Suhail Al Mazrouei, the energy minister of the United Arab Emirates, said the decision to cut production was technical, not political. It is important to look at the technical aspects of the equation and to see any concerns about the economy and the state of the economy.

The United States may then introduce countermeasures, including the release of additional oil reserves and an embargo on some products.The White House is said to have asked the Department of Energy to analyze whether banning the export of gasoline, diesel and other refined petroleum products will lower prices. This is a controversial idea, but it is getting the attention of some people within the Biden administration.