The increase in oil prices after the impact of the extension of Saudi production cuts

According to the Fars International Economic Group, quoted by Reuters, following Saudi Arabia’s announcement to extend its voluntary production cuts until August, as well as Russia’s supply reduction amid the market’s unstable economic outlook, oil prices rose in trading today.

Brent crude was up 41 cents at $75.06 a barrel, and U.S. crude was up 42 cents at $70.21.

Fundamental factors affecting the market have not had as much impact on the price path as expected, the volatile macro outlook is what the market is currently focused on, analysts at ING Bank wrote in a note.

The American oil market is closed due to the official holiday, and the country’s crude oil lost about one percent of its value yesterday.

Saudi Arabia announced on Monday that it will extend its voluntary production cut of 1 million barrels per day until August, the state news agency reported yesterday. Russian Deputy Prime Minister Alexander Novak said that Russia will also reduce its oil exports by 500,000 barrels per day in August.

This represents a 1.5 percent drop in global supply and brings the OPEC+ production cut to 5.16 million barrels per day.

U.S. crude oil inventories are expected to fall by about 1.8 million barrels in the week ending June 30, the third consecutive week of decline. Official statistics will be published tomorrow.

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