Crude oil prices rise to 3-month high. What’s next?

economictimes.indiatimes.com:

The Opec-plus countries, which pump almost 40% of the world’s crude, have a broader plan to limit supply into 2024 and prop up global oil prices. In October 2022 and April this year, the production cartel decided to cut output of its member countries to tackle the supply glut and boost prices. Saudi Arabia, the top producer of the Opec cartel unanimously cut its output by another one million barrels per day from July.

This voluntary reduction is on top of the broader deal by the Opec plus countries. The country also flagged that it may continue with reduced barrels in the coming months. Likewise, Russia announced a reduction in export by 500,000 barrels a day in August and 300,000 bpd in September.

So far, the total production curb pledged by the Opec-plus producer group is 5.16 million bpd, which comes to about 5% of the daily global demand. Signs of economic recovery, especially from the US and Europe are raising hopes of increased demand. As per the latest data, the US economy is growing better than expected in the second quarter, eliminating the fear of a recession.

Besides, the European economy returned to growth and the region’s inflation continues to fall in the second quarter of 2023. Earlier, there was an assumption that global oil prices will stall this year due to weak economic growth on the back of severe monetary tightening which could curb demand. However, now the outlook has been revised by agencies.

Goldman Sachs expects an all-time high consumption of 102.8 million bpd in July and predicts solid growth in consumption in the second half of this year. In addition, as per the latest reports from Opec and IEA, global demand would rise by more than 2 million bpd in 2023. In the meantime, most of the demand