Rise in Oil Prices and OPEC Cuts

Oil prices have been steadily rising, reaching $95 per barrel this week due to several factors. Saudi Arabia surprised the market by announcing an extension of its voluntary cuts of 1 million barrels a day through the end of the year, exceeding market expectations. Additionally, coordinated cuts by Russia further contributed to the increase in oil prices. These cuts have tightened an already tight market, resulting in a 2.7 million barrel per day deficit in the third quarter. The market is expected to remain in a deep deficit through the first half of 2024, with oil prices likely to stay in the mid-80s and possibly exceeding $90 for the time being.