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Saudi Output Cut Extension Likely: Commerzbank

OIL

An extension to Saudi Arabia’s 1mbpd voluntary oil production cuts is very probable, as the market would otherwise risk a very high supply surplus in the first half of next year, Commerzbank said in a note.

  • The latest price slide makes it likely that the kingdom will extend its 1mbpd cut for one more quarter when OPEC+ is having its next ministerial meeting on 26 November.
  • “Concerns about demand have replaced the fear of production outages related to the Middle East conflict”, the note said.
  • RBC said in a note this week that chances for Saudi Arabia to extend the cut well into 1Q24 have increased recently due to price pressure amid renewed fears about Chinese oil demand and the overall macroeconomic outlook.

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