OPEC+ decision led to US criticism of Saudi Arabia

Oil, high pressure on prices

photo_camera PHOTO/MOHSSEN ASSANIMOG - File photo. Oil field

The instability of crude oil prices in recent weeks has the market as a whole in turmoil. Despite the investments made to reduce its dependence in recent years, the fact is that the black gold continues to be a key commodity for the world's major economies.

That is why the recent decision by OPEC and its allies to cut production by more than two million barrels a day from November has generated so much concern. A much larger-than-expected adjustment to prop up prices close to 100 dollars per barrel that has not gone down well with US President Joe Biden.

A step that accentuates the risks of recession and threatens a possible political conflict between the US and Saudi Arabia in the midst of the energy crisis caused by the war in Ukraine and the sanctions against Russia. In this respect, Biden has already warned the producer country that it will pay the consequences of this cutback, considering that it represents an endorsement of Putin.

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Saudi Arabia has assured that the OPEC+ decision was purely economic and unanimous among its members. At the same time, it recalled that military cooperation between the two countries, especially the heavy burden of arms sales to Riyadh, serves the interests of both countries.

Consequently, experts have raised their forecasts for the price of Brent crude to rise above 100 dollars a barrel in the coming months, despite the efforts of the United States to contain the rise in prices by releasing its reserves.

In fact, UBS believes that the price of crude could rise to 125 dollars a barrel if Russia reacts to the oil price cap that the seven richest countries in the world are trying to implement, something that would make the market much tougher.

Meanwhile, Goldman Sachs has also updated its crude oil price expectations following OPEC's move. In the case of Brent crude, the North Sea barrel, they have raised their estimate for the fourth quarter of 2022 to 110 dollars, which would lead to a potential price of 104 dollars for the whole year, up from the previous 99.

This article was originally published in Capitalmadrid.com. Read the original

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