Oil prices rose early Monday after two of the world’s largest exporters Russia and Saudi Arabia said they would stick to their additional voluntary production cuts until the end of the year.
While the move isn’t a huge surprise, it does keep supply tight and is giving a boost to Brent crude and West Texas Intermediate (WTI) prices, which have fallen for two consecutive weeks. Brent crude futures, the international benchmark, rose 1.4% to $86.11, while WTI futures climbed 1.6% to $81.80.
Saudi Arabia said it will continue its extra cut of 1 million barrels per day through next month, reaffirming an announcement in September, in a statement Sunday. Russia then reiterated its plan to keep its additional cut of 300,000 barrels per day in place until the end of December.
Deputy Prime Minister Alexander Novak said the cut will be reviewed next month to consider deepening the cut or increasing production.
In affirming previous announcements, the two major exporters have pushed oil prices higher. However, Brent crude is still significantly below its 2023 settlement high of near $96.55 a barrel, reached in September, despite getting a lift from the Israel-Hamas conflict.
Whether Saudi Arabia and Russia decide to keep their cuts going into the early part of 2024 is likely to be key in determining where oil prices go from here.
Write to Callum Keown at [email protected]
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