After OPEC+ leader Saudi Arabia announced an additional 1 million barrels of crude oil production cuts per day, international crude oil prices jumped significantly. Some analysts returned to the bullish ranks and began to expect that Brent oil could rebound to $100 a barrel.
At the 35th OPEC+ ministerial meeting held in Vienna, the major oil-producing countries negotiated to extend the previously reached production reduction agreement to 2024, and adjusted the total crude oil production target in 2024 to an average of 40.46 million barrels per day.
According to the production reduction agreement reached this time, the Ministry of Energy of Saudi Arabia announced that in order to jointly maintain the stability of the international crude oil market, Saudi Arabia will voluntarily cut an additional 1 million barrels of crude oil per day from July, and the daily output will drop to 9 million barrels. The Ministry of Energy of Saudi Arabia also said the plan was for one month and an extension might be considered.
"Saudi Arabia wants to cut production to protect oil prices from falling too low, and we now see the oil market as more prone to deficits later in the year," wrote Vivek Dhar, an analyst at Commonwealth Bank of Australia, in the latest statement. Dhar expects Brent to rise to at least $85 a barrel by the fourth quarter.
ANZ reiterated its target for Brent oil to rise to $100 a barrel by the end of the year, "Investors may increase their bullish bets, they have no worries. Because no matter what obstacles the market encounters, Saudi Arabia and OPEC will provide support. It now looks like the oil market will be tighter in the second half of the year."