​Oil hits 90 for first time in 2023 on surprise cut extension

2023-09-06
Summary:

Oil surged past $90 in 2023, reaching levels not seen since November, as Saudi Arabia and Russia prolonged supply cuts through year-end.

Oil rose above $90 for the first time in 2023 on Tuesday, the highest since November, as Saudi Arabia and Russia extended their voluntary supply cuts to the end of this year.


Saudi Arabia, OPEC’ de-facto leader, said it would keep its 1 million bpd reduction in place until the end of December.


Meanwhile, Russia’s deputy minister Alexander Novak announced that it would continue a 0.3 million bpd export reduction until the end of the year.


Investors had expected Saudi Arabia and Russia to extend voluntary cuts into October, but the three-month extension was unexpected.


Both countries said they would review the supply cuts monthly, and could modify them depending on market conditions.


Front month Brent and WTI contracts were also trading at their steepest premium since November to later-dated prices, reflecting concerns about the short-term supply.


Also supporting oil prices, Goldman Sachs said it now sees the probability of a U.S. recession starting in the next 12 months at 15%, down from an earlier forecast of 20%.

XBRUSD

But Brent has retreated below $90 in early Asia trade on Wednesday. It will likely be trading sideways with focus back on the demand side though technical indicators suggest further gains.


Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

Investors increasingly bullish on US equities before holiday

Investors increasingly bullish on US equities before holiday

Asian stocks are flat Tuesday, awaiting global inflation data. Wall Street closed for Memorial Day. Investors are buying on cooling inflation signs.

2024-05-28
​Japan renews push to support yen along with G7

​Japan renews push to support yen along with G7

Yen up Monday, but no convincing rebound. Traders were puzzled by the 11% yearly loss, despite expected policy convergence.

2024-05-27
Russia Supply and US Stock Plague Oil Markets

Russia Supply and US Stock Plague Oil Markets

Friday's oil prices held steady as investors digested the Fed's rate comments amidst inflation concerns, supported by seasonal fuel demand.

2024-05-24