Oil prices on a global scale are currently at a three-month high and are expected to see their biggest monthly increase in over a year. This is due to the anticipation of Saudi Arabia continuing with voluntary output cuts until September, resulting in a tighter global supply.
At 12:05 AM GMT, the price of Brent crude futures declined by 9 cents to reach $84.90 per barrel, while US West Texas Intermediate crude dropped 17 cents to settle at $80.41 per barrel.
Later today, the September Brent crude contract will expire. The most active contract for October recorded a price of $84.23 per barrel, which is down by 18 cents.
On Friday, Brent and West Texas Intermediate reached their highest levels since April and continued to rise for the fifth consecutive week. The prices were driven by a global shortage of oil and the anticipation of an end to US interest rate hikes. These gains mean that both benchmarks are likely to end July with their largest monthly increases since January 2022.
According to analysts, it is anticipated that Saudi Arabia will continue its voluntary reduction of oil production by one million barrels per day for an additional month, which will include September.
According to a note by Goldman Sachs analysts on July 30, since mid-June, oil prices have increased by 18%. This is due to a significant increase in demand, and a decrease in supply from Saudi Arabia. As a result, the market deficit has returned, and growth pessimism has been abandoned.
According to analysts, the additional Saudi cut of 1 million barrels per day is anticipated to continue until September, then decrease by half in October. The bank’s prediction for Brent crude remains at $86 a barrel for December, and they anticipate prices to increase to $93 during the second quarter of 2024.