Oil prices are falling on Tuesday after a slight rise in the previous session amid decisions by Saudi Arabia and Russia to extend voluntary production cuts.
The cost of January futures for Brent crude oil on the London ICE Futures exchange as of 7:10 a.m. on Tuesday amounted to $84.77 per barrel, which is $0.41 (0.48%) lower than at the close of the previous session. On Monday, the price of these contracts rose by $0.29 (0.3%) to $85.18 per barrel.
December futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.36 (0.45%) to $80.46 per barrel by this time. As a result of the previous trading, the value of these contracts increased by $0.31 (0.4%) to $80.82 per barrel.
The market is under pressure from fears of a weakening global economy and, consequently, oil demand. “Weak economic expectations are holding back the oil market and justifying the position of OPEC+ countries limiting production,” OANDA analyst Craig Earlam said, as quoted by Market Watch.
Last weekend, it became known that Saudi Arabia decided not to change the volume of voluntary oil production cuts and will keep it at 1 million bpd until the end of 2023.
In December, Riyadh may review the parameters of the restrictions to make a decision either to deepen the reduction or to increase production, the Saudi state agency reported on Sunday, citing an official source in the country’s Energy Ministry.
Saudi state-owned Saudi Aramco said on Monday that it will keep the price of the main grade of oil supplied to Asia, Arab Light, unchanged in December. The price of this grade for Asian buyers has been rising for five months in a row.
The Russian Federation will extend until the end of December 2023 an additional voluntary reduction in the supply of oil and oil products to world markets by 300 thousand barrels per day, which came into effect in September and October 2023.
