Oil prices are appreciating after Saudi Arabia and Russia reaffirmed that they will maintain the extra cuts in production and supply of this raw material by more than one million barrels a day until the end of the year.
Investors are also assessing the possibility of new US sanctions on oil from Iran, one of the world’s ten largest crude producers.
West Texas Intermediate (WTI) – traded in New York – added 0.99 per cent to 81.31 dollars per barrel. Meanwhile, North Sea Brent – the benchmark for European imports – rose 0.86 per cent to 85.62 dollars per barrel.
Saudi Arabia revealed that it would maintain its voluntary cut of one million barrels a day in December, keeping production at around nine million barrels a day. Russia, meanwhile, revealed that it would maintain its cut of 300,000 barrels a day. Both decisions were expected by the market.
In a note, ING analysts, quoted by Bloomberg, estimate that the market will be in surplus in the first quarter of the year, “which could be enough to convince the Saudis and Russians to maintain the current cuts”.