Oil prices rose as Saudi Arabia plans to extend its production cuts. Oil prices rose on expectations of tighter supplies due to production cuts from Saudi Arabia and Russia, but concerns over a slowdown in the global economy continued to weigh on prices.
International benchmark Brent crude is trading at $75.25 a barrel, up 0.80 percent from $74.65 at the close of the previous session, according to market data.
At the same time, US benchmark grade West Texas Intermediate (WTI) was trading at $70.41 a barrel, up 0.88% from the previous closing price of $69.79 a barrel. Crude oil prices have come under intense pressure recently due to weak economic data. The market saw a slowdown in demand from major crude oil consumers.
The United States, China and India have pushed down macroeconomic indicators while the European Union continues to impose economic sanctions on Russia. Earlier this week, Saudi Arabia, Russia and Algeria announced their intention to tighten oil supply restrictions, pushing oil prices higher on concerns over slowing global economic activity.
Specifically, Saudi Arabia has announced that it will extend its voluntary cuts of 1 million barrels per day (bpd) it implemented in July for another month until August, with a possible extension thereafter.
The cut will bring Saudi oil production to about 9 million barrels per day in August. Meanwhile, Russia announced in August it would voluntarily cut its oil supply by 500,000 barrels a day, cutting exports to world markets “as part of efforts to keep oil markets in balance.”
This is in addition to the country cutting production by 700,000 barrels per day from February production levels. Algeria also announced in August that it would cut production by another 20,000 barrels per day. The cut is in addition to the 48,000 bpd cut announced in April.
At the 35th Ministerial Meeting on June 4, the OPEC Plus Group agreed to maintain the current production cuts until the end of the year, and in July, Saudi Arabia, an OPEC swing producing country, will implement an additional voluntary cut of about 1 million barrels per day. agreed.
Saudi Arabia’s Energy Minister Abdulaziz bin Salman has announced that the production cuts could be extended from July. Meanwhile, Russian state news agency TASS announced in August that Russia would voluntarily cut oil exports by 500,000 barrels per day. Russia’s Deputy Prime Minister Alexander Novak told reporters on Monday, “As part of efforts to keep the oil market in balance, Russia cut exports to world markets in August and voluntarily reduced its oil supply to 500,000 a day. We will reduce the barrel,” he said.
The new decision will affect exports, not production, according to TASS.
