New York — Oil prices gained about 2% on Thursday as Saudi Arabia and Russia were taking steps to keep supplies tight into September and possibly beyond.
Brent futures rose $1.86, or 2.2%, to $85.06 a barrel in New York and US West Texas Intermediate crude rose $2.03, or 2.6%, to $81.52.
Saudi Arabia said it will extend a voluntary oil output cut of 1-million barrels per day (bpd) for another month to include September, adding it could be extended beyond that or deepened.
That would keep the kingdom’s voluntary output cut in place for a third month after it announced voluntary cuts for July and extended those cuts for August.
Saudi Arabia’s production is expected to be about 9-million bpd in September. In Russia, meanwhile, deputy prime minister Alexander Novak said the country will cut oil exports by 300,000 bpd in September.
Those announced cuts follow moves in June by oil cartel Opec and its allies such as Russia, collectively known as Opec+, to limit oil supply into 2024.
Opec+ ministers will on Friday meet to review the market.
The central bank in China, the world’s second-biggest oil consumer, pledged to guide more financial resources towards the private economy, suggesting refreshed urgency from Beijing to bolster confidence as economic momentum weakens.
In other parts of the world, however, there were still concerns that interest rate hikes to reduce stubborn inflation could slow economic growth and reduce oil demand.
In the UK, the Bank of England raised interest rates to a 15-year high of 5.25% from 5% on Thursday to try to tame inflation.
In Europe, a downturn in eurozone business activity worsened more than initially thought in July as the slump in manufacturing was accompanied by a further slowing of growth in the bloc's dominant services industry.
Global oil and stock markets declined after Fitch Ratings downgraded the main US credit rating, reflecting an expected fiscal deterioration as well as a high and growing government debt burden.
Reuters
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