{"id":3581,"date":"2023-02-10T13:45:20","date_gmt":"2023-02-10T13:45:20","guid":{"rendered":"http:\/\/roydadnaft.ir\/English\/?p=3581"},"modified":"2023-02-10T13:45:22","modified_gmt":"2023-02-10T13:45:22","slug":"oil-prices-jump-2-on-russian-plan-to-cut-output","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/3581\/","title":{"rendered":"Oil prices jump 2% on Russian plan to cut output"},"content":{"rendered":"
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Oil prices jumped more than 2% on Friday, heading for weekly gains, as Russia announced plans to reduce oil production next month after the West imposed price caps on the country’s oil and oil products.<\/p>\n\n\n\n

Brent crude futures rose $1.71, or 2.02%, to $86.21 a barrel by 1148 GMT. U.S. West Texas Intermediate (WTI) crude futures were up $1.57, or 2.01%, at $79.63.<\/p>\n\n\n\n

Both contracts rose by more than $2 earlier in the session and were on course for weekly gains above 8%.<\/p>\n\n\n\n

Russia plans to\u00a0reduce its crude oil productionin March by 500,000 barrels per day (bpd), or about 5% of output, Deputy Prime Minister Alexander Novak said on Friday.<\/p>\n\n\n\n

“The Russian economy is fraying in the face of Western sanctions,” PVM analyst Stephen Brennock said.<\/p>\n\n\n\n

The G7 economies, the European Union and Australia agreed to ban the use of Western-supplied maritime insurance, finance and brokering for seaborne Russian oil priced above $60 a barrel from Dec. 5 as part of Western sanctions over Russia’s actions in Ukraine.<\/p>\n\n\n\n

The EU also banned purchases of Russian oil products and set price caps from Feb. 5.<\/p>\n\n\n\n

“We believe the decision (to cut oil production) is not completely a voluntary one … as market factors likely forced the Russian side to make this decision,” said UBS analyst Giovanni Staunovo.<\/p>\n\n\n\n

Russia’s output last year defied predictions of a decline, but its oil sales will prove more difficult in the face of the new western sanctions.<\/p>\n\n\n\n

Limited tanker availability could also hinder Russia’s efforts to divert refined oil to other markets, Staunovo added.<\/p>\n\n\n\n

The announcement reversed bearish sentiment that characterised trade on Thursday and Friday morning against a backdrop of\u00a0weak demand data\u00a0from China and recession fears in the United States. It also follows\u00a0a rise\u00a0in weekly U.S. jobless claims and higher oil inventories.<\/p>\n\n\n\n

Goldman Sachs lowered its Brent 2023 price forecast to $92 a barrel (bbl) from $98\/bbl and its 2024 price forecast to $100\/bbl from $105\/bbl.<\/p>\n\n\n\n

Hedge fund manager Pierre Andurand remains bullish, however, telling the Financial Times that oil could hit $140\/bbl later in 2023 on a Chinese demand recovery.<\/p>\n

Updated on