Oman Oil Price Hits $90.41 a Barrel
The price of the Oman oil futures contract for November delivery 2023 jumped by $1.20 to reach $90.41 a barrel on Wednesday, the Dubai Mercantile Exchange (DME) said.
The average price of Oman oil (September delivery 2023) has stabilised at $80.54 per barrel, thus $5.76 per barrel higher than August delivery 2023, the DME statement added. The oil market has been rising since the beginning of the summer when attention turned to supply levels as crude exporters moved to restrict production to support stagnating prices, according to an analyst.
“In this regard, the announcement from Saudi Arabia and Russia to extend production cuts until the end of the year has fuelled fears of a tighter market and has propelled the market to the upside at a time when concerns started to shift towards demand,” George Pavel, General Manager at Capex.com Middle East, told Times of Oman.
“In this regard, an economic boost in the region could follow a sustainable rise in oil prices in the coming months. Stronger local economies could also help support local stocks some of which have been under pressure for some time,” he said.
Higher oil prices could be beneficial for Oman and other Gulf Cooperation Council Countries (GCC) that are sometimes heavily dependent on crude exports.
Lately, traders’ attention has been returning to China and Europe where economic activity has been weaker than expected. China remains the largest importer of oil in the world and a softer-than-expected economic recovery could weigh on oil demand and depress prices.
“However, the Saudi and Russian decisions could strengthen oil’s uptrend for the remainder of the year in the absence of any shock in demand,” George Pavel added.
According to a media report, the Kremlin said on Wednesday that Russian President Vladimir Putin spoke by phone with Saudi Crown Prince Mohammed bin Salman and that both parties indicated that the latest agreements on reducing oil supplies guarantee stability in global energy markets.
On Tuesday, the Kingdom of Saudi Arabia and Russia announced the extension of the voluntary oil supply reduction until the end of the year, despite the rise in oil prices in the markets and analysts’ expectations of tight supplies in the fourth quarter.
Russia will extend its decision to reduce its oil exports by 300,000 barrels per day, while Saudi Arabia will extend its voluntary reduction in oil production by one million barrels per day.
The Kremlin said that the two sides praised the great level of cooperation between their countries in the Organisation of Petroleum Exporting Countries.
The Kremlin explained in a statement about the call: “It was noted that the agreements reached on reducing oil production, along with voluntary commitments to reduce supplies, make it possible to ensure the stability of the global energy market.” – With inputs from ONA
