Oil Prices Rise as Russia, Saudi Extend Production Cuts

Oil prices rose about 2% on Tuesday after the announcement of an extension in voluntary supply cuts by Saudi Arabia and Russia.

These cuts, totaling 1.3 million barrels per day (bpd), will continue for an additional three months, extending through December.

In the wake of this news, Brent crude futures for November crossed the $90 mark, reaching this level for the first time since last November. Simultaneously, crude (WTI) October futures also saw a 2% increase.

It was widely anticipated that Saudi Arabia would extend its voluntary cuts into October. Additionally, Russia, a fellow member of OPEC+, has extended its voluntary cuts through the end of the year with the aim of maintaining stability and balance in the oil markets, according to Deputy Prime Minister Alexander Novak. 

Russia, the world's second-largest oil exporter, is reducing exports by 300,000 bpd during this period. Russia has been coordinating its output and export reductions with Saudi Arabia in addition to existing OPEC+ supply cuts. 

Russia had previously stated its intention to voluntarily cut oil exports by 500,000 bpd in August, followed by a reduction of 300,000 bpd in September. Furthermore, Russia plans to reduce its oil production by 500,000 bpd until the end of 2024.

Congressmen Dan Crenshaw, Chuck Fleischmann, and Rob Wittman were last year buying shares of the United States Oil Fund (USO:US) and The Energy Select Sector SPDR Fund (XLE:US) ETFs that offer exposure to the oil market.