Crude Oil is Headed for Sixth Straight Week of Rising Prices
August 4, 2023
Crude oil prices rallied in yesterday’s trading as news hit that Saudi Arabia will extend their voluntary additional oil output cut of 1 million bpd through September versus August. OPEC+ oil output cuts now total approximately 5.16 million bpd through September.
Russia’s Deputy Prime Minister, Alexander Novak, said Russia will cut oil exports by 300,000 bpd in September. He said Russia will continue to voluntarily reduce its oil supply in the month of September to ensure the oil market remains balanced.
The following is from John Kemp of Reuters. US service sector firms reported a continued expansion in business activity but at a slower rate in July. The purchasing managers index for the service sector (which also covers mining, agriculture, construction, real estate, and healthcare) slipped to 52.7 in July down from 53.9 in June. The much larger and more labor-intensive service sector is gradually following manufacturing into a slowdown in response to higher interest rates.
OPEC+’s technical advisory committee meets today, and the expectation is that the production quotas will stay at their current levels. Quotas are roughly 3.6 million bpd, but Russia, Saudia Araia and Algeria have been making additional cuts to production.
Crude oil is headed for its six straight week of gains, the longest positive streak in more than a year.