Saudi, Russian production cuts keep oil prices high


Crude oil prices remained up on Friday after Saudi Arabia and Russia announced to extend their voluntary production cuts.
As of 1240 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.45 (+0.53 percent) to reach $85.59 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.41 (+0.50 percent) to $81.96 a barrel.
However, the price of Russian Sokol jumped by $2.01 (+2.60 percent) to $79.27. Arab Light prices witnessed an increase of $1.85 (+2.13 percent) to reach $88.55 a barrel. 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.
The price of oil is trying to make a fresh three-month high after Saudi Arabia and Russia extended their output cuts on Thursday. Saudi Arabia announced that it would extend its one million barrels a day cut by a further month until the end of September, while Russia said that it would cut output by 300,000 barrels a day next month. Thursday’s announcement followed Wednesday’s news of a sharp drop in crude oil stocks. The weekly EIA report showed a much larger-than-expected stock draw of 17 million barrels, dwarfing the predicted -1.367 million barrels and a prior week’s -0.6 million.
Brent oil remains in a multi-week bullish channel and is a couple of dollars away from levels last seen in early April this year. Ongoing oil demand is pushing the price higher as fears of a recession in the US continue to fade.
A panel of OPEC+ is unlikely to change the current oil production policy of the alliance at the Friday meeting, as prices rallied to more than a three-month high. Crude oil has posted five consecutive weekly gains on an expected tightening of supply because of output cuts by the OPEC+ as well as some involuntary outages.