عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Oil Prices Rise on Saudi, Russian Voluntary Production Cuts

A drilling rig in the Hasaba oil field, 150 kilometers north of Jubail Industrial City (Aramco website)
A drilling rig in the Hasaba oil field, 150 kilometers north of Jubail Industrial City (Aramco website)
TT
TT

Oil Prices Rise on Saudi, Russian Voluntary Production Cuts

A drilling rig in the Hasaba oil field, 150 kilometers north of Jubail Industrial City (Aramco website)
A drilling rig in the Hasaba oil field, 150 kilometers north of Jubail Industrial City (Aramco website)

Oil prices rose on Tuesday after Saudi Arabia and Russia, the world's biggest oil exporters, deepened oil cuts on Monday.

Saudi Arabia said it would extend its voluntary oil output cut of one million barrels per day (bpd) for another month to include August, adding that the cut could be extended beyond that month.

Also, Russian Deputy Prime Minister Alexander Novak said Moscow would cut its oil exports by 500,000 barrels per day in August.

Ricardo Evangelista, an analyst at ActivTrades financial brokerage firm, attributed the rise in oil prices during Tuesday's session to market traders' optimism following Saudi Arabia's announcement of extending the decision to reduce oil production rates until August, in addition to the Russian cuts.

Speaking to Asharq Al-Awsat, he said that the future outlook for oil demand rates remains uncertain, clouded by the lingering uncertainty surrounding the global economic recovery.

Later, Algeria said it would cut oil output by an extra 20,000 barrels from Aug. 1-31 to support efforts by Saudi Arabia and Russia to balance and stabilise oil markets, its energy ministry said.

The voluntary cut will be on top of a 48,000 barrel reduction decided in April, it said.

Libyan Oil Minister Mohamed Oun said his country welcomed the Saudi decision which will have "positive impact on market balance between global producers, consumers, and on global economy".

Brent crude futures were up 0.6%, or 43 cents, at $75.84 a barrel by 11:52 a.m. EDT (1652 GMT). US West Texas Intermediate crude rose 0.6%, or 39 cents, to $71.03. During Friday's session, Brent 0.8% and WTI rose 1.1%.

"The kingdom's production for the month of August 2023 will be approximately 9 million barrels per day," Saudi state news agency SPA quoted an official source from the Ministry of Energy as saying.

"This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets," the SPA official source was quoted as saying.

Most Viewed

 
 
Business

ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
TT
TT

ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo

European Central Bank President Christine Lagarde renewed her call for economic integration across Europe on Friday, arguing that intensifying global trade tensions and a growing technology gap with the United States create fresh urgency for action.
US President-elect Donald Trump has promised to impose tariffs on most if not all imports and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.
"The geopolitical environment has also become less favorable, with growing threats to free trade from all corners of the world," Lagarde said in a speech, without directly referring to Trump.
"The urgency to integrate our capital markets has risen."
While Europe has made some progress, EU members tend to water down most proposals to protect vested national interests to the detriment of the bloc as a whole, Reuters quoted Lagarde as saying.
But this is taking hundreds of billions if not trillions of euros out of the economy as households are holding 11.5 trillion euros in cash and deposits, and much of this is not making its way to the firms that need the funding.
"If EU households were to align their deposit-to-financial assets ratio with that of US households, a stock of up to 8 trillion euros could be redirected into long-term, market-based investments – or a flow of around 350 billion euros annually," Lagarde said.
When the cash actually enters the capital market, it often stays within national borders or leaves for the US in hope of better returns, Lagarde added.
Europe therefore needs to reduce the cost of investing in capital markets and must make the regulatory regime easier for cash to flow to places where it is needed the most.
A solution might be to create an EU-wide regulatory regime on top of the 27 national rules and certain issuers could then opt into this framework.
"To bypass the cumbersome process of regulatory harmonization, we could envisage a 28th regime for issuers of securities," Lagarde said. "They would benefit from a unified corporate and securities law, facilitating cross-border placement, holding and settlement."
Still, that would not solve the problem that few innovative companies set up shop in Europe, partly due to the lack of funding. So Europe must make it easier for investment to flow into venture capital and for banks to fund startups, she said.