Oil extends gains, hovers at four-month highs on OPEC+ cuts
Oil prices extended gains on Monday to touch their highest levels since mid-April after top producers Saudi Arabia and Russia pledged to keep supplies down for another month to tighten global markets further and support prices. Brent crude futures rose 25 cents, or 0.3%, to $86.49 a barrel by 0023 GMT, while U.S. West Texas Intermediate crude was at $83.05 a barrel, up 23 cents, or 0.3%.
Both contracts notched their sixth consecutive weekly gains last week, the longest winning streak since December 2021 to January 2022. Several factors have underpinned prices in recent weeks including expectations of U.S. interest rate hikes tapering off, a reduction in OPEC+ supplies and hopes of stimulus boosting oil demand recovery in the world's top crude importer China after a dismal second quarter.
The world's top exporter Saudi Arabia on Thursday extended its voluntary production cut of 1 million barrels per day (bpd) to the end of September, adding that it could be extended beyond then or deepened. The kingdom's production for September will be around 9 million bpd. Russia said on Thursday would cut oil exports by 300,000 bpd in September.
In addition, a Russian warship was last week seriously damaged in a Ukrainian naval drone attack on Russia's Black Sea navy base at Novorossiysk. The port that handles 2% of the world's oil supply has resumed operations. Saudi Arabia's comments that the cuts may be deepened caught the attention of the market, ANZ analysts said in a note.
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