Oil: six weeks of price growth, with production cuts in Saudi Arabia and Russia

OPEC+'s monitoring committee recommended no changes to the coalition's supply policy during an online meeting on Friday, according to a delegate.

The committee "will continue to carefully assess market conditions" and noted that OPEC+ members are willing "to address market developments and stand ready to take additional measures at any time," according to a statement on the OPEC's website. organization.

This recommendation follows Riyadh's announcement yesterday that it will extend a unilateral cut of 1 million bpd through September – and potentially deepen the reduction thereafter – to shore up a fragile market. Russia has announced it will cut an additional 300,000 barrels a day of production in September.

The continuation of these heavy supply reductions has caused prices to rise, which have been continuously growing for the past six weeks as can be seen from the WTI price chart below

In this case it is clear that Saudi is helping Russia to keep oil prices high, thereby maximizing revenue for the Russian government. The scarcity of supply has also allowed Moscow to minimize the discounts normally granted to customers, especially oriental ones.

This productive squeeze will not make the USA happy because it gives an inflationary boost precisely during the primaries and now 15 months after the elections. Inflation is considered to be the biggest fault of the Biden administration and this flare-up in oil prices is a blow, intended or not, to the presidential candidacy.

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The article Oil: six weeks of price growth, with production cuts in Saudi Arabia and Russia comes from Scenari Economici .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/petrolio-sei-settimane-di-crescita-dei-prezzi-con-i-tagli-di-produzione-di-arabia-sudita-e-russia/ on Fri, 04 Aug 2023 14:40:14 +0000.