Last Update: June 05, 2023, 23:55 IST
New York, United States (USA)
FILE PHOTO: An Oil and Natural Gas Corporation (ONGC) well at an oil field on the outskirts of India’s western city of Ahmedabad, February 10, 2016. (Image: Reuters)
Brent crude futures were up $1.23, or 1.6%, at $77.36 a barrel by 1:12 p.m. EDT (1712 GMT) after touching a session high of $78.73.
Oil prices rose more than 1% on Monday after the world’s top exporter Saudi Arabia pledged to cut output by another 1 million barrels per day (bpd) from July, easing macroeconomic headwinds that depressed markets. is to compete.
Brent crude futures were up $1.23, or 1.6%, at $77.36 a barrel by 1:12 p.m. EDT (1712 GMT) after touching a session high of $78.73.
US West Texas Intermediate crude rose $1.11, or 1.6%, to $72.85 after hitting an intraday high of $75.06.
Both contracts extended gains of more than 2% on Friday after the Saudi Energy Ministry said the kingdom’s output in July would drop from about 10 million bpd in May to 9 million bpd. This is the biggest cut in Saudi Arabia in years.
The voluntary cuts are on top of a broader deal by the Organization of the Petroleum Exporting Countries (OPEC) and producers including Russia to limit supply through 2024 as the OPEC+ grouping seeks to prop up flagging oil prices.
International Energy Agency (IEA) chief Fatih Birol said on Monday that the prospect of higher oil prices has increased sharply following the new OPEC+ deal.
OPEC+ pumps about 40% of the world’s crude and has cut its production target to a total of 3.66 million bpd, which is 3.6% of global demand.
“The market is still trying to assess the impact of the Saudi production cut,” said Phil Flynn, an analyst at Price Futures Group.
SEB analyst Bjarne Schildrop said market reaction on Monday was relatively muted after previous OPEC+ cuts failed to lift prices for a longer period of time.
Consultancy Rystad Energy said additional Saudi cuts could push market losses to more than 3 million bpd in July, which could push prices up in the coming weeks.
Goldman Sachs analysts said the production deal was “moderately bullish” for oil markets and could see Brent prices rise by between $1 and $6 a barrel in December 2023, depending on whether Saudi For how long does Arabia maintain production at 9 million bpd.
“The immediate market impact of this Saudi cut is likely to be low, as inventory building takes time, and there is already some meaningful scope for market cuts,” said analysts at the bank.
Saudi Arabia raised prices of its key crude Arab Light to Asian buyers in July to a six-month high, following a pledge to cut its production.
The actual impact of many OPEC+ cuts will be small as lower targets for Russia, Nigeria and Angola bring them in line with their actual production levels. In contrast, the United Arab Emirates (UAE) was given permission to increase production targets by 200,000 bpd to 3.22 million bpd to reflect its larger production capacity.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – reuters,
