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After Saudi Arabia and Russia announced a further extension to their voluntary production cuts on Tuesday, extending a combined 1.3 million barrel per day (bpd) reduction for an additional three months through December, oil prices increased by around 2%.
By 1334 GMT, November Brent crude LCOc1 futures were up $1.44, or around 1.6%, to $90.44 per barrel, surpassing the $90 mark for the first time since last November.
Meanwhile, October WTI CLc1 futures for the United States increased by $1.85, or approximately 2%, to $87.4.
Oil Prices Rise 2% as Saudi Arabia and Russia Extend Production Cuts
According to official news agency SPA, Riyadh’s decision to extend its 1 million bpd voluntary cut will be reviewed each month to determine whether to further reduce the cut or raise output.
It was generally anticipated that Saudi Arabia will continue its voluntary reduction until October.
According to Deputy Prime Minister Alexander Novak on Tuesday, Russia, an additional member of OPEC+, has extended its voluntary cutbacks through the end of the year “to maintain stability and balance” on the oil markets.
The second-largest oil exporter in the world will decrease shipments by 300,000 bpd during this time. Along with the supply cutbacks already being made by OPEC+, it has been reducing output and exports in concert with Saudi Arabia.
Russia has said that it will voluntarily reduce its oil exports by 300,000 bpd in September and 500,000 bpd in August, or around 5% of its output. Until the end of 2024, Russia is also lowering its oil production by 500,000 bpd.