Brent and WTI rally as supply cuts are extended

Brent (OIL) and WTI (OIL.WTI) surged over 1.5% following the output announcement from Saudi Arabia. The Kingdom announced that it will extend the current 1 million barrel output cut for 3 months, until the end of the year. This announcement comes as a surprise – while Saudi Arabia was expected to confirm a 1-month extension through October, investors did not expect an outright 3-month extension! On top of that, Russia also announced that its 300k barrels export cut will be extended through December 2023.

Saudi and Russian announcements caught markets off guard and triggered a massive price reaction on the oil market. Brent (OIL) rallied above $90 per barrel and reached the highest level since mid-November 2022. Source: xStation5