Oil on track to score weekly gain as Saudi Arabia, Russia output cuts tightens supply; Brent above $90/bbl
macroeconomic uncertainty. Oil producers Saudi Arabia and Russia extended their voluntary oil output cuts of a combined 1.3 million barrels per day (bpd) to the end of the year which resulted in a sharp surge in international crude prices - reaching a 10-month high peak earlier this week. Brent crude futures were up 53 cents to $90.45 a barrel, while US West Texas Intermediate crude (WTI) futures were up 39 cents at $87.26 a barrel, according to news agency Reuters.
Both benchmarks closed up about 2 per cent last week - at $88.49 a barrel for Brent and $85.02 a barrel for WTI - in anticipation of the cut announcements. In the previous session, both benchmarks ended slightly lower amid volatile trade on multiple signals warning of weaker demand in the coming months. Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a September 19 expiry, were last trading higher by 0.76 per cent at ₹7,282 per bbl, having swung between ₹7,165 and ₹7,82 per bbl during the session so far, against a previous close of ₹7,227 per barrel.
-Saudi Arabia and Russia extended their voluntary oil cuts to the end of the year, by 1 million bpd and 300,000 bpd respectively. These are on top of the April cut agreed by the Organisation of Petroleum Exporting Countries and its allies (OPEC+) running to the end of 2024. Investors had estimated Saudi Arabia and Russia to extend voluntary cuts into October, but the three-month extension was unexpected.
-On the demand side, a key concern is China, the world's largest oil importer. The country has frustrated markets due to its sluggish post-pandemic recovery, while stimulus pledges have fallen short of expectations. -However, even in times of lacklustre economic activity, China tends
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