The supply cuts announced by Saudi Arabia and Russia are expected to dominate oil prices for the remainder of this year.
With oil futures inching closer to $100 a barrel, many investors took profits on the rally given ongoing macroeconomic concerns.
Oil settles lower but ends quarter up 28% on tight global supply
Sept 29 (Reuters) - Oil prices settled 1% lower on Friday due to macroeconomic concerns and profit taking, but rose about 30% in the quarter as OPEC+ production cuts squeezed global crude supply.
- Front-month Brent November futures settled down 7 cents to $95.31 per barrel at the contract's expiry, up about 2.2% in the week and 27% in the third quarter.
- The more liquid Brent December contract was settled down 90 cents to $92.20 per barrel.U.S.
- West Texas Intermediate crude (WTI) settled down 92 cents to $90.97, up 1% in the week and 29% in the quarter.
The U.S. oil and gas rig count, an early indicator of future output, fell by seven to 623 in the week to Sept. 29, the lowest since February 2022, energy services firm Baker Hughes (BKR.O) said in its closely followed report on Friday.
- While the total rig count fell by 51 in the third quarter, the cuts have slowed compared with a reduction of 81 in the second quarter as oil prices have rebounded due to tightening supplies.
- Brent is forecast to average $89.85 a barrel in the fourth quarter and $86.45 in 2024, according to a survey of 42 economists compiled by Reuters on Friday.
The OPEC+ ministerial panel meeting will take place on Oct. 4 and there is "increasing probability the voluntary supply cuts by Aramco are reduced," National Australia Bank analysts said in a client note, referring to Saudi Arabia's state oil producer.
However, a run towards $100 per barrel could be short-lived because of "the artificial nature of supply shortages in the system, and the fragile macro environment", said Suvro Sarkar, energy sector team lead at DBS Bank.
___________________________________________________________________________Russia likely generated an additional $2.8 billion over the past quarter, according to Energy Aspects data. Meanwhile, Saudi Arabia has likely pulled in about $2.6 billion in extra revenue.
Russia and Saudi Arabia have likely made close to $3 billion this quarter as OPEC+ production cuts push oil toward $100 a barrel
Russia and Saudi Arabia have likely pulled billions in additional oil revenue after steep oil production cuts lifted crude prices.
- Russia has generated an extra $2.8 billion in oil revenue this quarter compared to the April through June period, according to Energy Aspects estimates cited by the Wall Street Journal.
- Saudi Arabia, meanwhile, has likely pulled an extra $2.6 billion over that time frame, the equivalent of gaining an extra $30 million a day.
OPEC+ members initially cut production by 2 million barrels a day last October, causing oil prices to spike.
Then, Saudi Arabia and Russia implemented their own voluntary production cuts this summer,
- with Saudi Arabia slashing production by 1 million barrels a day
- while Russia slashed production by half a million barrels a day.
- The effects of tighter supply have already started to be felt in the energy spot market, with oil prices now hovering near a 10-month-high.
- Brent crude, the international benchmark, traded around $93 a barrel on Friday, while West Texas Intermediate crude traded around $92 a barrel.
Higher oil prices could be a boon for both nations, with the money helping to fund Saudi Arabia's various lavish spending projects as well as Russia's war on Ukraine.____________________________________________________________________
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