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Oil prices surge after falling below key threshold as report says Saudi Arabia plans to extend production cuts into 2024

oil rig
Pixabay/jp26jp
  • US and international oil prices jumped on Friday by more than 4% after a week-long slump.

  • Saudi Arabia is considering prolonging production cuts into 2024, the Financial Times reported.

  • OPEC+ is set to convene in Vienna on November 26 to discuss any adjustments to output.

US and global oil prices surged on Friday following a week-long slump, as the Financial Times reported top producer Saudi Arabia is considering prolonging its production cuts into 2024.

West Texas Intermediate jumped 4.03% to $75.80 a barrel, and Brent crude, the international benchmark, moved higher 4.24% to $80.70 a barrel. Both benchmarks had dipped to multi-month lows below the important $80 a barrel threshold earlier in the week.

Sources familiar told the FT that Saudi officials were likely to extend the country's current one million barrel-a-day cut into at least the spring.

Previously, the voluntary cuts had been expected to end at the end of 2023.

OPEC+ leaders are set to convene in Vienna on November 26 to cement any new decisions on oil output among member states, and any further pullbacks in production could raise tensions with the US. Falling oil prices would be the main driver of the cuts, but some members, the report said, are concerned about the Israel-Palestine conflict and the crisis unfolding in Gaza.

One person said an additional OPEC+ cut of a million barrels a day could take shape due to the conflict. Kuwait, Algeria, and Iran, per the FT, are the members most agitated by the ongoing conflict in Gaza.

No final decisions have been made, and sources maintained that any public comments by Prince Abdulaziz bin Salam would veer away from Israel-Palestine and focus on oil markets.

"You should not underestimate the level of anger there is and the pressure leaders in the Gulf feel from their populations to be seen to respond in some manner," one source told the FT.

Read the original article on Business Insider

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