Brent crude futures traded above $90 a barrel on Wednesday morning as Saudi Arabia and Russia decided to extend their voluntary production output cuts till the end of 2023. Saudi and Russia are the major crude oil producers in the world.
At 9.53 a.m. on Wednesday, November Brent oil futures were at $90.06, up by 0.02 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $86.70, up by 0.01 per cent.
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September crude oil futures were trading at ₹7,200 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹7,218, down by 0.25 per cent, and October futures were trading at ₹7,154 against the previous close of ₹7,164, down by 0.14 per cent.
Month review of cut
Saudi news agency SPA, which quoted an official source from the Saudi Energy Ministry, said Saudi Arabia will extend the voluntary cut of one million barrels a day, which has gone into implementation in July and was extended to include August and September, for another three months until the end of December 2023. In effect, Saudi’s production for October, November, and December will be approximately 9 million barrels a day.
It said this voluntary cut decision will be reviewed monthly to consider deepening the cut or increasing production. The report also said that this cut is in addition to the voluntary cut previously announced by Saudi Arabia in April 2023, which extends until the end of December 2024.
Meanwhile, Russian Deputy Prime Minister Alexander Novak has said his country will extend an additional voluntary reduction in oil supplies to world markets by 300,000 barrels a day until the end of December 2023.
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In a statement posted on the website of the Russian government, Novak said the voluntary decision to reduce oil production will be reviewed monthly to consider the possibility of deepening the reduction or increasing production, depending on the situation on the world market. The measure is in addition to the voluntary reduction previously announced by Russia in April 2023, which will last until the end of December 2024.
Both Saudi and Russia said this additional voluntary cut comes to reinforce the precautionary efforts made by OPEC (Organization of the Petroleum Exporting Countries) and its allies, known as OPEC+, to support the stability and balance of oil markets.
September aluminium futures were trading at ₹201.10 on MCX in the initial trading hour of Wednesday morning against the previous close of ₹200.70, up by 0.20 per cent.
On NCDEX, guar gum October futures increased by 0.63 per cent to ₹13,341 a quintal. Guarseed October contracts increased by 0.85 per cent to ₹6,511 a quintal.