(Bloomberg) -- Saudi Arabia may be getting closer to declaring its oil-market mission accomplished than traders realize, according to Rapidan Energy Group.

Riyadh has propelled Brent crude toward $100 a barrel by slashing production just as global fuel demand hit record levels. That may soon be enough for the kingdom to start reviving output again, rather than risk a further price surge that damages the economy, according to Rapidan. 

Traders are underestimating “that the Saudis will take their foot off the break sooner,” Bob McNally, the consultant’s president and a former White House official, told Bloomberg television on Thursday. “They do not want to deliberately over-tighten the market, because if you get a spike, then you get a demand collapse, and you get a bust.”

Global oil markets are “getting squeezed hard,” especially for fuels like diesel and heating oil as peak winter consumption approaches, McNally said. With a particularly fragile economic backdrop, that poses dangers for central banks like the Federal Reserve, he added.  

“The real sensible way to bring prices to heel is for Saudi Arabia and OPEC+ to say: ‘We’ve made our point, we’ve scared away the speculative shorts’,” McNally said. “We’re not there yet, but we’re getting closer.”

Riyadh has pledged to maintain its additional 1 million barrel-a-day supply reduction until the end of the year, in concert with export curbs by fellow OPEC+ member Russia. But it will also review the strategy each month and has said it could adjust production higher or lower. 

The Organization of Petroleum Exporting Countries and its partners will hold a market-monitoring session next week, and then a full ministerial meeting in late November to set production policy for 2024.

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