Oil Prices Reach Record Highs in 2023

Saudi Arabia has decided to extend their reduction in oil outputs into December, though previously September was the cut-off.

Oil prices are reaching a new peak in 2023.

A barrel of oil now costs $90.

More from CNBC:

Saudi Arabia on Tuesday extended its 1-million-barrels-per-day voluntary crude oil production cut until the end of the year, according to the state-owned Saudi Press Agency.

The reduction will put Saudi crude output near 9 million barrels per day over October, November and December and will be reviewed on a monthly basis.

Riyadh first applied the 1 million-barrels-per-day reduction in July and has since extended it on a monthly basis. The cut adds to 1.66 million barrels per day of other voluntary crude output declines that some members of the Organization of the Petroleum Exporting Countries have put in place until the end of 2024.

Fellow heavyweight oil producer Russia — which leads the contingent that joins OPEC nations in the OPEC+ coalition — also pledged to voluntarily reduce exports by 500,000 barrels per day in August and by 300,000 barrels per day in September. Russian Deputy Prime Minister Alexander Novak on Tuesday said that it will extend its 300,000 barrels-per-day reduction of exports until the end of December 2023 and will likewise review the measure on a monthly basis, according to the Kremlin.

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The cuts are described as voluntary because they are outside of OPEC+’s official policy, which commits every non-exempt member to a share of production quotas. OPEC Secretary-General Haitham al-Ghais has previously said that resorting to voluntary reductions outside of OPEC+ decisions does not suggest divisions in policy views among alliance members.

The Ice Brent futures contract with November delivery was up $1.07 per barrel to $90.07 per barrel at 2:13 p.m. London time, with WTI futures higher by $1.40 per barrel to $86.95 per barrel.

Many Americans are already feeling the burn of increased gas prices.

And I hate to say it.

But, it’s only going to get worse:

Oil prices jumped dramatically on Tuesday morning as Saudi Arabia announced it would extend its production cuts until the end of the year and Russia announced it would extend its export cuts of 300,000 bpd for the same period.https://t.co/Aem86DRLoG

— OilPrice.com (@OilandEnergy) September 5, 2023

“I keep advising them that they will be ouching" pic.twitter.com/Tt3rVox9I2

— OilPrice.com (@OilandEnergy) September 5, 2023

WTI oil price surges to nearly $87 / bbl pic.twitter.com/P0Rp7llynr

— Energy Headline News (@OilHeadlineNews) September 5, 2023

More from the Financial Times:

Saudi Arabia, which reduced its output by 1mn barrels a day in July in order to prop up prices, said the cuts would be continued until the end of December instead of September.

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The reduction in output is in addition to a voluntary 500,000 b/d cut announced by the kingdom in April. Saudi Arabia’s oil output is likely to remain at 9mn b/d until the end of December, 25 per cent lower than its maximum capacity of 12mn b/d.

I wouldn’t count on the Biden administration to do anything significant about the problem.

If President Trump was in the White House he would be in Saudi Arabia negotiating with them about oil.

#MAGA2024