September 6 (Reuters) – Oil Prices Inch Up as Saudi Arabia and Russia Prolong Output Cuts, Heightening Supply Concerns
Oil prices saw a modest uptick on Thursday, fueled by growing concerns of a supply shortage following the extension of voluntary supply cuts by Saudi Arabia and Russia until the year’s end.
At 00:08 GMT, Brent crude futures climbed 17 cents, or 0.2%, reaching $90.21 per barrel. This marks the first time it surpassed the $90 threshold since November, marking the sixth consecutive day of gains.
U.S. West Texas Intermediate crude (WTI) futures also increased by 23 cents, or 0.3%, to $86.92 per barrel, having recently hit a 10-month high.
Recent trading has shown near-term oil prices carrying their most substantial premium over longer-dated prices since November, reflecting growing anxiety regarding immediate supply constraints.
Saudi Arabia’s state news agency, SPA, revealed on Tuesday that the nation would extend its voluntary 1 million barrels per day (bpd) oil output cut until the conclusion of December 2023, as stated by an energy ministry official.
Simultaneously, Russia announced its commitment to extending its voluntary reduction of oil exports by 300,000 bpd until the year’s end, as declared by Deputy Prime Minister Alexander Novak in a statement also released on Tuesday.
These voluntary cuts by Saudi Arabia and Russia supplement the April agreement made by various OPEC+ producers, which extends until the close of 2024.
Both nations have committed to monthly reviews of their cut decisions, allowing for potential adjustments in response to market conditions, according to statements by SPA and Novak.