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IEA: S. Arabia's cut threatens oil price stability
The International Energy Agency (IEA) remarked in its Oil Market Report (OMR) published on Wednesday that Saudi Arabia's decision to extend its crude output cut of one million barrels per day (bpd) until the end of the year introduced "the risk of another surge" in price volatility "that would be in the interest of neither producers nor consumers."
The agency also said that "the extension of output cuts by Saudi Arabia and Russia through year-end will lock in a substantial market deficit" in the fourth quarter of the year. Still, the IEA kept its projection for the global oil demand growth in 2023 at 2.2 million bpd, with the largest contribution coming from the increased industry activity in China.
Additionally, the IEA noted that the Organization of Petroleum Exporting Countries and its partners' (OPEC+) output declined by two million bpd "with overall losses tempered by sharply higher Iranian flows."