[Bigiron]

What does the OPEC+* move to cut oil supply mean for the global economy?
Econgram_World

Facts:
1) OPEC+ will cut oil supply by about 1.6mn barrels/day until the end of the year, putting upward pressure on oil prices.

2) However, some oil-producing countries that are not members of OPEC, such as Nigeria and Guyana, will increase their output by roughly 1mn barrels/day until the end-year. That will decrease the impact of the OPEC+ move, but not enough to offset it.

3) At the same time, the oil demand is expected to grow by 2mn barrels/day this year.

4) As a result, the International Energy Agency* predicts that the gap between the demand and supply for oil (demand minus supply) will reach 2mn barrels/day by Q3 2023. The worldwide oil demand currently stands at roughly 100mn barrels/day. 

Analysis:
1) The OPEC+ move to cut oil supply came as a surprise because the oil demand is expected to grow this year due to China’s economic rebound*.

2) The resulting oil demand-supply gap will cause an increase in inflation. That might hinder global economic growth.  

https://www.wsj.com/articles/saudi-led-o..._lead_pos3

[Niubee]

They know a recession is here. If they don't cut volume, the slump in oil price will be greater later on.