(New York) Oil prices accelerated higher on Friday as traders expect continued supply cuts from OPEC members.
A barrel of West Texas Intermediate (WTI), for October delivery, gained 1.98% to $88.55, its highest price since November.
The barrel of Brent from the North Sea, for delivery in November, which is the first day of use as a benchmark contract, jumped 2.29% to 85.55 dollars, close to its highest level of price of the year.
“It looks like Saudi Arabia is going to want to keep pushing prices up. They’ve committed to these production cuts that haven’t worked so well so far, so they’re going to be tempted to pursue them,” Kpler’s Matt Smith said.
“In terms of our expectations,” at Kpler “we continue to bet on these production cuts from Saudi Arabia until the end of the year,” the analyst said. “We believe it will happen, because they want to support the courts.”
“Most market participants and analysts also assume that the cuts will be extended,” said Commerzbank analyst Barbara Lambrecht.
In parallel with the reductions observed by OPEC at the rate of 1.6 million barrels per day since May, Saudi Arabia has opted for a new production cut of one million barrels per day for July, extended twice until August, then until September.
These expectations are also based on the latest remarks by Russian Deputy Prime Minister Novak. He assured that Russia and the members of the Organization of the Petroleum Exporting Countries and their allies (OPEC) have agreed on further production cuts.
“We will publicly announce the main parameters next week,” he told Russian President Vladimir Putin in a televised government meeting on Thursday.
In the US market, oil prices also reacted positively to the mixed job market figures.
The unemployment rate in the United States climbed in August to its highest level since February 2022 at 3.8% despite more than expected job creation at 187,000, the Labor Department announced on Friday.
This mixed data “indicates that (US Federal Reserve, Fed) interest rates may stop rising and even fall,” suggested Craig Erlam of Oanda, a more “favorable scenario for the medium-term economic outlook.” », and therefore for the demand for crude oil.
