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Oil Prices Rise as Saudi Arabia and Russia Confirm Extended Supply Cuts

Crude oil futures saw a positive surge on Monday, November 6, as both Saudi Arabia and Russia announced their commitment to ongoing oil supply reductions until the end of the year.

The West Texas Intermediate (WTI) crude futures experienced a 0.4% increase, gaining 31 cents, closing at $80.82 per barrel. Meanwhile, Brent crude futures also climbed, rising by 0.34% or 29 cents, concluding the day at $85.18 per barrel.

Analyst John Kilduff from Again Capital LLC explained that oil prices rebounded following the official confirmation by Saudi Arabia and Russia. Both countries reaffirmed their commitment to reducing oil supplies, with Saudi Arabia pledging to extend its voluntary oil production cut by 1 million barrels per day until the year’s end. Russia also announced an extension of its 300,000 barrels per day reduction in oil exports until the end of the year.

Giovanni Stanovo, an analyst at UBS, anticipates the possibility of Saudi Arabia and Russia extending oil supply cuts into the first quarter of 2024. This decision is attributed to the historical pattern of slowing oil demand at the start of the year, as well as concerns regarding economic stagnation. Additionally, the OPEC+ group’s objectives in maintaining stability and balance in the oil market play a significant role in these deliberations.

Investors are currently monitoring key economic data releases from China, a significant oil-importing nation. On November 7, the Chinese Customs Administration will unveil import, export, and trade balance figures for October, shedding light on oil demand trends in the country. Furthermore, tomorrow, the China National Bureau of Statistics will release the Consumer Price Index (CPI) and Producer Price Index (PPI) for October.

Another area of concern for investors is the situation in the Strait of Hormuz, where geopolitical tensions have been escalating since Israel declared war on Hamas on October 7. The Strait of Hormuz is a crucial route for global oil transportation, and its stability is of paramount importance to the oil market.

According to data from the US Energy Information Administration (EIA), the Strait of Hormuz, located between Oman and Iran, facilitates the transport of one-fifth of the world’s daily oil production. It serves as a vital conduit connecting Middle Eastern oil producers to global markets.

Bank of America has cautioned that if Israel takes retaliatory action against Iran, it could jeopardize the stability of the Strait of Hormuz, potentially leading to oil prices surging above $250 per barrel. Iran, a significant oil producer, and Iran-backed groups, including Hamas and Hezbollah, have raised concerns about the region’s stability.

The oil market remains sensitive to geopolitical events and supply dynamics as the year progresses, with the ongoing commitment of major oil-producing countries to supply cuts continuing to influence prices. Investors will be closely monitoring these factors in the coming months.

The Spot Market is Open

Tuesday, November 7, 2023

Updated at


Crude oil




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