According to Bloomberg, however, these cuts will not become real until the EU sanctions on Russian crude exports take effect in early December, considering also that Russia is successfully diverting most of the crude left by European buyers to India, Turkey and China.
Note also that in September the cartel as a whole fell some 3.6 million b/d below its collective ceiling anyway.
Investment banks continue revising their price projections. Goldman Sachs, for example, has raised its fourth-quarter estimate for Brent by $10 to $110 a barrel,
while its 2022 price forecast has been revised upward from $99 to $104 per barrel and 2023 forecast from $108 to $110 per barrel.
Similarly, Morgan Stanley raised its forecast for the first quarter of 2023 by $5 to $100 per barrel, as it anticipates that oil will end up soaring later this year.
It also predicts tighter supply going forward, indicating that the oil market will be short of 0.9 million b/d in 2023, up from 0.2 million b/d earlier.
Natural calamities are yet another factor affecting the oil market. Late last month, Hurricane Ian shut 9% of oil production in the Gulf of Mexico.
Rising prices could compound the economic challenges and thus erode demand. The knock-on effect triggered by the energy crunch in the middle of last year is still being felt keenly today.