The price of British Brent crude oil sometimes rose to 90.18 USD/barrel, while the price of US WTI oil sometimes reached 86.81 USD/barrel.
A day earlier, news agency TASS Moscow will continue the cut by 300,000 barrels per day until the end of the year, Russian Deputy Prime Minister Alexander Novak was quoted as saying.
According to Mr. Novak, this decision is aimed at strengthening the preventive measures taken by OPEC+ to maintain the stability and balance of the oil market. OPEC+ is an alliance between the Organization of the Petroleum Exporting Countries (OPEC) and several external oil producing countries.
For this reason, Saudi Arabia announced a continued cut of 1 million b/d until the end of December 2023. Both Saudi Arabia and Russia said they would review the cut decisions every month and make adjustments based on market conditions.
An oil refinery in the city of Volgograd – Russia Photo: Reuters
Mr. George Lyon, Senior Vice President, Rystad Energy Company (Norway), commented that the latest moves by Russia and Saudi Arabia will further strengthen the oil market.
According to Mr Lyon, it is not easy to predict the impact of this development on inflation and economic policy in the West. However, higher oil prices will make countries more likely to tighten their finances to curb inflation.
At the meeting in August 2023, OPEC+ agreed to maintain the current exploitation output policy. The 23-member alliance has cut total production by up to 3.66 million barrels/day.
Mr. Giovanni Staunovo, expert at UBS Bank (Switzerland), commented that policy flexibility allows Saudi Arabia to maintain control over the oil market. UBS estimates the oil market will be short by more than 1.5 million b/d in the fourth quarter of 2023, with Brent oil prices rising to USD 95/barrel by the end of the year.