Oil is heading for its biggest rise in a year and a half after OPEC production cuts

Oil extractors in Bakersfield, California (REUTERS/Lucy Nicholson/File) (Lucy Nicholson/)

He Petroleum is about to register biggest monthly rise since early 2022after supply cuts by Saudi Arabia and Russia caused prices to rebound.

He Brent crude and the west texas Intermediate is heading to close July with its highest monthly rise since January 2022.

He Brent crudea world reference, is currently listed above $85 per barrel and has risen 13.7% in the month. The crude West Texas Intermediatea reference in the USA, has exceeded 81 dollars per barrel and is up 16.4% this month.

A record demand has pushed up oil priceswhile the production cuts of producing countries threaten to further reduce world supply.

According to a survey of Reuters made on Monday, the crude production of the Organization of the Petroleum Exporting Countries (OPEC) fell in July, after Saudi Arabia made an additional voluntary cut as part of the latest OPEC+ deal to support the market and a disruption curbed supply from Nigeria.

The OPEC+ oil cartel agreed last month to limit the supply of oil until 2024. (REUTERS/Dado Ruvic/File)
The OPEC+ oil cartel agreed last month to limit the supply of oil until 2024. (REUTERS/Dado Ruvic/File) (Dado Ruvic/)

The OPEC It pumped 27.34 million barrels per day (bpd) this month, according to the survey, down 840,000 bpd from June. It is the lowest level since September 2021according to polls from Reuters.

Riyadh pledged to cut output by 1 million bpd in July as part of the OPEC+ deal from the previous month. The price of oil began to rebound in response by shooting up prices against the near $71 end of June.

According to analysts, Saudi Arabia is expected to extend its voluntary reduction of 1 million barrels per day beyond August. For its part, the OPEC+ oil cartel agreed last month to limit oil supplies until 2024.

The Saudi move was added to previous voluntary cuts announced by Riyadh and other OPEC+ members, and was added to reductions made under a group agreement in late 2022.

The increase in exports in Angola and Iraq capped the decline in OPEC output in July, according to the Reuters poll.

OPEC production remains below target by almost 1 million bpdpartly because Nigeria and Angola lack the capacity to pump as much as the agreed level.

According to the survey, Saudi Arabia cut its output by 860,000 bpd mom. Kpler’s figures show a decline in crude oil exports of more than 600,000 bpd month-on-month, although another tracker noted a smaller drop in exports.

Russian Deputy Prime Minister alexander novakhas also said that Russia it will cut crude exports by 500,000 barrels a day next month.

The second largest decline occurred in Nigeriawhere Shell suspended the loading of Forcados crude due to a possible leak at the export terminal. Libyan production fell due to a brief interruption in some fields due to a protest.

The study of Reuters It intends to follow the evolution of the offer in the market. It is based on transport data provided by external sources, flow data from Refinitiv Eikon, information from companies that track flows such as Petro-Logistics and Kpler, and information provided by sources from oil companies, OPEC and consultants.

(With information from Reuters)

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