2023-07-04 19:01:20
oil
Oil prices rose about 2 percent on Tuesday, as the market assessed the impact of Saudi Arabia and Russia cutting their production in August in light of the weak global economic outlook.
Saudi Arabia said, on Monday, that it would extend voluntary production cuts of one million barrels per day until August, while Russia volunteered to reduce production and export levels in the same month by 500,000 barrels per day, and Algeria by 20,000.
Tamas Varga, an analyst at BVM, said that if these cuts are fully implemented, the amount of production cuts will reach 5.36 million barrels per day compared to August 2022, and may even exceed that with the inability of several countries in the OPEC + alliance to meet their full production quotas.
The total production cuts currently amount to more than five million barrels per day, or the equivalent of five percent of the total global oil production.
price movements
Brent crude futures settled Tuesday, up $1.60 at $76.25 a barrel.
US West Texas Intermediate crude increased $1.44 to $71.23.
The two benchmarks closed down about 1 percent in the last session, as the bleak economic outlook led to oil giving up early gains.
Surveys showed a decline in global manufacturing activity due to slowing demand in China and Europe, and manufacturing activity in the United States also fell in June to levels last recorded during the first wave of the Covid-19 pandemic.
Analysts said that the uncertainty surrounding the global economy is likely to overshadow the efforts of the OPEC + alliance to reduce supplies.
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