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Saudi Arabia, along with the oil cartel OPEC+, is known to take action when oil prices drop a little too low for their liking.
Brent oil, also called North Sea oil, has mostly hovered between 72 and 75 dollars a barrel in recent weeks. Now Saudi Arabia has announced that they are extending their voluntary production cut of 1 million barrels per day. day until August, reports Bloomberg.
North Sea oil rose almost 2 per cent on the news, but is up 1.2 per cent at 13:00 to USD 76.00 a barrel. By comparison, a barrel of North Sea oil cost 74.82 dollars at closing time on the Friday before the weekend.
WTI oil rises 1.1 percent, and is traded for $71.25 a barrel.
The news also sends several oil shares on the Oslo Stock Exchange up. Equinor and Aker BP rise around 3 percent.
Waited cut
Saudi Arabia’s cut of 1 million barrels per day started in July, and will continue until August, in addition to existing cuts agreed in OPEC+. According to the state-owned news agency Saudi Press Agency, the cuts may be extended further.
Thus, the kingdom’s oil production will be 9 million barrels per year. day, which according to Bloomberg is the lowest for several years. So far, there has been little reward in the form of persistently high oil prices, the newspaper points out.
Saudi Arabia needs an oil price of over 75 dollars a barrel in order not to run a budget deficit. Thus, today’s cut was not particularly surprising to traders and analysts, who saw this coming.
Russia follows suit
Russia has also stepped in, and will reduce its oil exports by 500,000 barrels per year. day in August, according to Deputy Prime Minister Alexander Novak.
It was expected that the price of oil would see a solid rise this year, but it has failed to materialise. North Sea oil closed at 86 dollars a barrel before the New Year, but rising interest rates, fears of a recession and low demand from China have rather weakened the price.
Wall Street heavyweights such as Goldman Sachs and Morgan Stanley initially saw oil prices above $100 a barrel by the end of the year. Those forecasts have now been shelved. Nevertheless, oil prices are expected to rise during the second half of the year.
Media are denied access
Opec will hold a meeting in Vienna on 5 and 6 July, and according to NTB, several major media outlets will be denied access. The same thing happened before the oil cartel’s meeting in June.
Bloomberg, Reuters and The Wall Street Journal are among those who will not be able to cover the meeting from the inside.
– We are very concerned that Opec is excluding certain journalists, including from Bloomberg, from next week’s meeting, says Bloomberg in a statement.
2023-07-03 11:22:37
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