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Crude oil prices are on the rise once again, with Brent crude surpassing $90 a barrel for the first time since November. The reason behind the increase in crude oil is the announcement of production cuts by OPEC+ countries.
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The cuts will continue until December
Saudi Arabia has announced It will not cut crude oil production now, but will continue to cut 1 million barrels through December. This decision means that total production for 6 months will be around 9 million barrels per day, the lowest level in many years.
On the other hand, Russia has also announced export cuts. Russian Deputy Prime Minister Alexander Novak announced in a separate statement that the 300,000 barrels per day export cut would be extended for the same period.
Crude oil crosses $90
Brent crude rose $1.04, or 1.2%, to settle at $90.04 a barrel on Tuesday. Crude settled above $90 for the first time since November 16, 2022. WTI futures settled up $1.14, or 1.3%, at 86.69, a 10-month high.
Goldman Sachs said the OPEC+ decisions added bullish risks to its outlook for prices, with the bank’s analysts outlining several scenarios, including Brent rising above $100 a barrel. Last week, 20 out of 25 analysts surveyed by Bloomberg predicted that additional cuts would be extended for an additional month.
According to a statement published by SPA (Saudi Press Agency), this voluntary cut decision will be reviewed every month to consider extending the cut or increasing production. Saudi Arabia’s goal is to create “stability and balance in oil markets”.