Oil Prices Jump 2% As Saudi Arabia And Russia Restrict Supply

Oil prices gained about 2% on Thursday as Saudi Arabia and Russia took steps to keep supplies tight into September and possibly beyond, reports Reuters.

Brent futures rose $1.94, or 2.3%, to settle at $85.14 a barrel, while U.S. West Texas Intermediate crude rose $2.06, or 2.6%, to settle at $81.55.

According to Reuters, A lack of big price moves in recent weeks has cut Brent's historic or actual 30-day close-to-close futures volatility to its lowest since February 2022

In other oil markets, U.S. diesel futures rose about 2% to close at their highest since January 2023.

Saudi Arabia said it will extend a voluntary oil output cut of one million barrels per day (bpd) for a third month to include September, adding it could be extended beyond that or deepened, reports Reuters.
Saudi production is expected to be around 9 million bpd in September.

Meanwhile Deputy Prime Minister Alexander Novak said Russia would cut oil exports by 300,000 bpd in September.

Those announced cuts follow moves in June by the Organization of the Petroleum Exporting Countries (OPEC) and its allies like Russia, collectively known as OPEC+, to limit oil supply into 2024, according to Reuters.

OPEC+ ministers will on Friday meet to review the market.

"We expect the (OPEC+) meeting to result in the producers' group continuing the production cuts initially made at its Oct. 5 meeting, and increased on a voluntary basis at its April 3 and June 4 meetings," analysts at ClearView Energy Partners, a research firm, said in a note.