Crude oil from the Organisation of Petroleum Exporting Countries (OPEC) traded last week at an average of 92.16 dollars/barrel, up 4.7 percent from the previous week’s average, the Vienna-based oil group reported on Monday.
With this rise, the weekly value of the barrel used as a benchmark by OPEC – a basket of thirteen grades of crude, one for each member country – stands at its highest level in ten months, having not breached the psychological barrier of $90 since mid-November 2022.
Analysts attribute the sharp rise in oil prices to the decision by Saudi Arabia, the world’s largest oil exporter and therefore the natural leader of OPEC, to extend until the end of the year the voluntary cut in its pumping -of one million barrels per day-, which it began to apply in July.
Russia cuts oil exports
In addition, Russia, head of the organisation’s ten petro-state allies, also extended the reduction of its oil exports by 300,000 barrels a day for the same period.
A sharp fall in the level of US crude stockpiles for the fourth week in a row also contributed to the upward trend in oil prices.
A sharp drop in the level of US crude stockpiles for the fourth week in a row also contributed to the upward trend in oil prices.
On a daily basis, OPEC crude oil futures rose ten times in a row to $92.97 a barrel on Thursday, before falling slightly on Friday to $92.84, according to data released by OPEC today.
Saudi Arabia to maintain production cut until the end of 2023
Saudi Arabia announced in early September that it will extend the voluntary reduction of one million barrels of oil per day, which it began implementing in July, until the end of 2023, a decision that aims to “support the stability and balance” of energy markets.
The official Saudi news agency SPA said the voluntary reduction will be implemented over the next three months, bringing oil output from the Organization of the Petroleum Exporting Countries’ (OPEC) the largest producer during this period to “approximately 9 million barrels per day”.
The reduction comes on top of another unilateral voluntary cut by Saudi Arabia implemented last April, which will run until the end of December 2024.
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