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Ill-timed

Oct 06, 2022

The decision of OPEC+ to cut daily oil production by two million barrels is, at least from the perspective of the West, ill-timed. The reaction on the oil price was immediate as the oil price is reverting its downward trend it had since mid-Summer and WTI crude trades back at 87.9 USD this morning. On the supply side of energy, there is not a lot to do as US strategic oil reserves are already at a multi-year record low. On the demand side, it is all dependant on the level of demand destruction in a slowing economic environment. That will not be an easy pill to swallow for businesses and consumers dealing with high inflation and interest rates.

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