Saudi Arabia extend oil production cuts, Brent surges above $90/bbl

Brent futures rose above $90/bbl for the first time since November 2022, after Saudi Arabia and Russia announced the extension of voluntary oil supply cuts through the end of the year.

PHOTO: Getty Images

The front-month ICE Brent contract was trading at $90.28/bbl at 14.00 GMT, up from $88.45/bbl at 9.00 GMT earlier today.

OPEC’s de facto leader Saudi Arabia has announced that it will continue to implement a voluntary production cut of 1 million b/d through the end of this year. Saudi Arabia began cutting output in July as global oil prices declined sharply on worries of oversupply and economic recession fears in major economies.

As a result of the output cuts, Saudi Arabia's oil production in the months of October, November, and December will be approximately 9 million b/d.

Soon after Saudi Arabia’s announcement, Russia also announced its decision to cut exports by 300,000 b/d through the end of this year.

With the market expected to face a significant deficit through the end of the year, the move is likely to have far-reaching implications for the global economy.

“Global oil inventories are now only 10 million bbls away from the record deficit set in June 2022, which reversed solely due to the largest release from [US] strategic political reserves in history,” said energy-focused hedge fund investor, Eric Nuttall.

By Debarati Bhattacharjee

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