Oil prices are on the rise for the second consecutive day, poised to secure their sixth consecutive week of gains. The surge in prices comes after Saudi Arabia and Russia, two of the world’s largest crude producers, pledged to cut output through the upcoming month.
As of 0042 GMT, Brent crude futures for October advanced by 30 cents, or 0.4%, reaching $85.44 per barrel. Simultaneously, U.S. West Texas Intermediate crude for September increased by 36 cents, or 0.4%, reaching $81.90.
On Thursday, Saudi Arabia announced an extension of its voluntary oil production cut of 1 million barrels per day (bpd) into September. This decision came just ahead of the meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia (known as OPEC+).
Thursday witnessed Brent rebounding from a 2% dip in the previous session, paving the way for a 0.4% weekly gain, while WTI is expected to close the week with a 1.4% increase. This marks the sixth week of consecutive gains for both benchmarks, representing their lengthiest streak of weekly growth in the current year.
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In June, OPEC+ reached a broad agreement to limit supply until 2024, with Saudi Arabia pledging to cut more production voluntarily for July and then extending it to August.
Despite the supply cuts, the market remains concerned about demand due to the latest U.S. economic data indicating tight labor markets and a slowdown in the service sector.
The commitment of major producers to output cuts is likely to have a significant impact on price movements, and further developments in economic indicators will play a crucial role in shaping the future trajectory of oil prices.
