HOUSTON: Oil prices rose on Monday after top exporters Saudi Arabia and Russia reaffirmed their commitment to extra voluntary oil supply cuts until the end of the year.
Brent crude futures rose $1, or 1.2%, to $85.89 a barrel by 12:13 p.m ET (17:13 GMT), while US West Texas Intermediate crude was up $1.11, or 1.4%, at $81.62. Saudi Arabia confirmed on Sunday it would continue with its additional voluntary cut of 1 million barrels per day (bpd) in December to keep output around 9 million bpd, a ministry of energy source said.
Russia also announced it would continue its additional voluntary cut of 300,000 bpd from its crude oil and petroleum product exports until the end of December. “Russia and Saudi have an iron clad agreement to stay with the same supply constraints into the end of the year, and yet demand for fuel continues to be stronger than most analysts have anticipated, keeping a good bid underneath the crude prices,” said Dennis Kissler, senior vice president of trading at BOK Financial.
The cuts could be extended into the first quarter of 2024 because of “seasonally weaker oil demand at the start of every year, ongoing economic growth concerns and the aim of producers and OPEC+ to support the oil market’s stability and balance”, said UBS strategist Giovanni Staunovo.
Oil prices rebounded after both benchmarks lost about 6% in the week to Nov. 3 as supply concerns driven by Middle East tensions eased. UN agency leaders saying “enough is enough” demanded a humanitarian ceasefire on Monday nearly a month into Gaza’s war, as health authorities in the enclave said the death toll from Israeli strikes now exceeded 10,000. Monday’s oil price gains may have been capped by an easing of crude throughput at Chinese refineries.
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