ISLAMABAD
Oil prices edged up on Wednesday to hover at a 10-month high after Saudi Arabia and Russia said on Tuesday they would extend supply cuts of a combined 1.3 million barrels per day to the end of the year.
As of 1245 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.02 (+0.02 percent) to reach $90.06 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.20 (+0.23 percent) to $86.89 a barrel.
Similarly, the price of Russian Sokol increased by $1.19 (+1.44 percent) to $84.04. Arab Light prices witnessed an increase of $1.16 (+1.25 percent) to reach $93.72 a barrel. On the other hand, the price for Opec Basket increased by $1.62 (+1.81 percent) to $91.27. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
Brent rallied yesterday following the announcement of production cuts gaining 1.2 percent at market close and settling at $90.04, while WTI ended the day 1.3 percent higher at $86.69.
As part of their voluntary cuts, Saudi Arabia is extending its one million bpd output reduction until December, while Russia is rolling over its export cut of 300,000 bpd until the end of the year.
Tightening market conditions come amid concerns about a demand slump due to sluggish economic growth in China, the world’s second largest economy and top oil importer. China’s economy expanded an annual 6.3 percent from April to June, after growing 4.5 percent in the previous three months, according to the latest data from the National Bureau of Statistics. China’s services activity grew at the slowest pace in eight months in August amid weak demand, a private sector report said on Tuesday.
Saudi Arabia began implementing its cut in July, which was later extended to include August and September. “In effect, the kingdom’s production for the coming months of October, November and December will be approximately nine million barrels per day,” the Saudi Press Agency reported on Tuesday, citing a Ministry of Energy official.
