Informist, Tuesday, Sep 5, 2023
–Saudi Arabia extends crude oil production cut of 1 mln bpd to Dec
–Russia extends crude oil output cut of 300,000 bpd till December
MUMBAI – Saudi Arabia said today that it will extend its voluntary production cut of crude oil of 1 mln barrels per day till the end of this year, according to a release by state-owned Saudi Press Agency.
“An official source from the Ministry of Energy announced that the Kingdom of Saudi Arabia will extend the voluntary cut of 1 mln barrels per day, which has gone into implementation in July and was extended to include August and September, for another three months until the end of December 2023, and in effect, the Kingdom’s production for the coming months of October, November, and December will be approximately 9 mln barrels per day,” the release said.
Saudi Arabia had said in June that it would implement a voluntary production cut of 1 mln bpd in July and later extended it to September. The 1-mln-bpd cut by Saudi Arabia is over and above existing production cuts by the Organization of the Petroleum Exporting Countries, and its allies, which amount to 3.66 mln bpd.
Meanwhile, Russian Deputy Prime Minister Alexander Novak told reporters today that the country has decided to extend the additional voluntary reduction in oil supplies by 300,000 bpd until the end of this year, according to news agency TASS.
Novak, as quoted by the agency, said that the decision to extend the reduction of oil supplies for export by the end of this year “is aimed at strengthening the precautionary measures taken by OPEC+ countries in order to maintain stability and balance of oil markets.”
After the announcements, crude oil prices pared losses and rose sharply as market players had expected the countries to extend the production cut into October.
Global oil supply is expected to remain tight for the rest of the year as top producers continue to restrict supply and keep oil prices firm in the near future.
At the time of writing this report, West Texas Intermediate crude oil on the New York Mercantile Exchange was up 1.9% at $87.21 per bbl, while Brent crude on the Intercontinental Exchange was at $90.31 per bbl, up 1.5% from the previous close. Brent crude prices touched the $90-per-bbl mark for the first time since November 2022. End
US$1 = 83.04 rupees
Reported by Sandeep Sinha
Edited by Tanima Banerjee
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