Analysts at CitiResearch shared their afterthoughts on the OPEC and its allies (OPEC+) oil output cut decision in the latest note.

Key quotes

"Our projections for 2023 without this cut was for a 2.1 million barrels per day (bpd) average oversupply, given weak demand and relatively ample supply, so such a real over 1 million bpd cut could halve this surplus."

"US Congress could be compelled to resurrect the so-called NOPEC (No Oil Producing and Exporting Cartels) bill again ... while SPR policy might also shift, and there could be greater impetus to complete an Iran nuclear deal.”

“The possibility of further supply disruptions, potential reshuffle of trade flows amid the upcoming Russian oil price cap and European embargo, and deteriorating macro-economic environment would continue to drive volatility through the winter and 2023.”

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