Brent rises after Saudi Arabia and Russia release joint statement

The front-month ICE Brent contract gained $0.90/bbl on the day, to trade at $75.88/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

Brent futures recovered the previous day’s loss after the oil market reacted positively to a joint statement released by major oil producers Saudi Arabia and Russia that urged all OPEC+ members to agree on supply cuts in a bid to “support the global economy.”

“They [Saudi Arabia and Russia] stressed the importance of continuing this cooperation, and the need for all participating countries to adhere to the OPEC+ agreement, in a way that serves the interests of producers and consumers and supports the growth of the global economy,” reported Saudi state-owned media agency SPA.

Last month, the Organization of the Petroleum Exporting Countries and its allies [OPEC+] agreed to a combined supply reduction of 2.2 million b/d in the first quarter of 2024. Oil analysts expect this move to support oil prices.

Brent’s price gained further support after Russia agreed to disclose more data on refining and export volumes following a request from the OPEC+ group to ensure transparency, Reuters reported citing sources. This comes amid concerns in the oil market if Russia has been sticking to its oil and oil products export cuts promises.

Downward pressure:

Meanwhile, a sharp rise in Brent futures was capped due to concerns about a slowdown in global oil demand, analysts said. Data released by China yesterday showed oil imports in November fell to 10.33 million b/d, a decrease of over 1 million b/d from October’s import (11.53 million b/d).

The drop in Chinese oil imports could signal declining oil demand in the world’s second-largest crude oil importer.

“The momentum in oil futures rode a modest downdraft following the release of overnight trade data from China, revealing a decline in crude inflows,” said SPI Asset Management’s managing partner Stephen Innes. “This figure [crude imports in November] is almost 9% below the import rate from when China grappled with COVID-19 lockdown measures a year ago,” he further commented.

By Aparupa Mazumder

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