Oil lifts as exporters press on with supply cuts

London — Oil prices rose on Monday, after top exporters Saudi Arabia and Russia reaffirmed their commitment to extra voluntary oil supply cuts until the end of 2023.

Brent crude futures rose $1.03, or 1.21%, to $85.92 a barrel by 8.34am GMT, while US West Texas Intermediate crude was at $81.58 a barrel, up $1.07, or 1.33%.

Oil rebounded on Monday after Brent and WTI futures each lost about 6% in the week to November 3.

Saudi Arabia confirmed on Sunday it would continue with its additional voluntary cut of 1-million barrels per day (bpd) in December to keep output at about 9-million bpd, a source at the ministry of energy said in a statement.

Russia also announced it would continue its additional voluntary supply cut of 300,000 bpd from its crude oil and petroleum product exports until the end of December.

ING analysts said in a note that the oil market will be in surplus in the first quarter of 2024, “which may be enough to convince the Saudis and Russians to continue with cuts”. But price gains could have been capped by an easing of crude oil throughputs at Chinese refineries.

Refinery runs are easing from record levels in the third quarter because of eroding profit margins and a scarcity of export quotas up to year end, sources said.

“The reaction to the Saudi-Russian decision over the weekend to extend their respective output and exports cut throughout December has been, to some extent, countered by the anticipated fall in China’s refinery throughput this month,” PVM analyst Tamas Varga said.

Investors will be looking ahead to more economic data from China after the world’s second-largest oil consumer released disappointing October factory data last week.

Reuters