no crude oil with price cap-

OPEC + has decided to cut oil production by 2 million barrels per day as proposed by the cartel’s technical committee. That is double what had been announced in recent days, when a cut of one million barrels was hypothesized. The decision is a move by Russia to embarrass the United States and the West, according to the Wall Street Journal. therefore, the biden administration’s attempt to put pressure on Middle Eastern producers to push them not to reduce production quotas failed, while an energy crisis is underway with the risk of recession. The chief economic and foreign policy advisers of the American president would have tried to put pressure on Middle Eastern allies, including Kuwait, Saudi Arabia and the Arab Emirates, for days to vote against the cut in production. In discussions between the White House and the Treasury Department, according to CNN, the cut in oil production was seen as a total disaster, which would have been considered a hostile act. The decision therefore slapped the Biden presidency. The reaction of the White House was not long in coming: the president disappointed by the short-sighted decision of OPEC + to cut production quotas while the world economy reckoned with the negative impact of Putin’s invasion of Ukraine, yes reads in a note.

Moscow: stop oil on those who impose the price cap

The US daily warns that the decrease in supply could lead to a rise in global prices and help Russia, a major oil exporter, pay for its war in Ukraine. The decision could also undermine the G7’s plan to cap the Russian oil price on the global market. On 28 September, the president of the EU Commission, Ursula von der Leyen, announced the eighth package of sanctions, which included the introduction of a price cap on Russian oil for third countries, as agreed at the beginning of September in the context of the G7. . In this regard, Moscow announces that it will stop supplying oil to countries that are imposing the price cap. This was announced by Russian Deputy Prime Minister Aleksandr Novak, according to Tass reports.

Major cut from April 2020

The production cut is the largest since April 2020 and goes in the direction of keeping prices high. OPEC + members said the decisions made should be read as a technical response to a declining global economy, particularly in China, where Covid-19-related restrictions have hurt oil demand. Beyond the official reasons, analysts agree that the cartel’s move is a gift to Moscow.

The effects on the stock exchanges

The OPEC decision sends the European stock exchanges into red (here the real-time quotes of the stock markets). The worst list is Milan which loses 1.52% like Madrid, followed by Frankfurt which drops 1.20% to 12,518.28 points. In Paris the Cac index marks -0.90% and 5,985.46 points, in London the Ftse 100 index registers -0.47% to 7,052.95 points. The rally on Monday and Tuesday was fueled by hopes that the Federal Reserve could start easing interest rate hikes, but the rise in US jobs has held back expectations. All sectors contributed to the decline in Piazza Affari, with the exception of the oil sector, driven by the recovery of crude oil after OPEC’s decision to cut production. Saipem (+ 8.56%) at the top of the list of increases, while Eni’s reaction (+ 1.59%) was more contained. Banca Generali (+ 1.62%) and StMicroelectronics (+ 1.46%) also performed well. Sales hit utilities instead, starting with Hera (-5.08%) and A2a (-3.86%). Furthermore, Pirelli (-4.08%), Tim (-4.04%), Banco Bpm (-3.2%) and Enel (-3.18%).

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About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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