The biggest surprise of this OPEC+ "rebel" production cut is not the "production cut" itself.

The most surprising thing about OPEC+'s "surprise" production cut is not the "production cut" itself, but the rare quick and unanimous decision, which also caught crude oil bears by surprise.

Sudden news on April 2 triggered a surge in crude oil; OPEC+, led by Saudi Arabia, announced a collective "voluntary" production cut, with a total production reduction of nearly 1.65 million barrels per day.

The move shocked the market, and oil prices soared in response, with cloth oil currently rising to $85 per barrel.

Compared with the output cut in October last year, this time, it seems to be much less controversial.

This weekend's decision does not come before the U.S. midterm elections, when rising fuel prices are a susceptible topic for the White House. Second, Brent crude ended last week at less than $80 a barrel, at least $5 cheaper than before the production cuts were announced in October.

More importantly, supply conditions in the oil market are less tight. Before the production cuts in October, OPEC+ oil inventories were 9.2 percent below the five-year average it tracks. The latest report shows that the current stock is only 2.9% lower than the following five-year average. In January, global inventories reached the highest level in September 2021 and are expected to increase further in February.

The production cuts, however, are ahead of the peak of the summer driving season, when demand tends to experience a seasonal increase. In addition, there were considerable supply disruptions in Iraq, where pipeline closures reduced exports by 470,000 bpd.

ClearView Energy Partners expects the latest cuts could lead to a supply deficit of 2.14 million barrels per day on average from the second quarter to the end of the year.

Perhaps most notable for the oil market is the speed with which decisions are made, and countries agree.

According to media reports, the production cut decision was finalized in just a few days, and some representatives only learned of it a day or two before the announcement. Two OPEC+ officials said the decision utterly took them aback.

However, before this, Saudi Crown Prince Abdulaziz repeatedly stated that production would be kept steady throughout the year to keep the market stable.

At the same time, the move also suggests policymakers behind this weekend's action could quickly change course if the oil market is tighter than OPEC+ initially assumed.

Another motivation for the production cuts is to crack down on speculators who have shorted crude oil.

According to CFTC data, as the European and American banking crisis erupted in March and oil prices fell, speculators' bearish bets on U.S. oil reached the highest point in four years, and bullish positions were reduced to the lowest point in more than a decade. Feel nervous.

Amrita Sen, head of research at 3Energy Aspects Ltd., said in an interview with the media that bears had dominated the market, and OPEC+ wants to drive them out.

Saudi Crown Prince Abdulaziz once said a famous saying, "Whoever gambles in the oil market will feel the pain like hell."

The weekly report released by the U.S. Commodity Futures Trading Commission (CFTC) last week showed that the number of contracts shorting U.S. WTI crude oil had dropped sharply, the most significant drop in nearly seven years since 2016, which means that many people who had bet on oil prices previously will fall of traders are closing positions.