Oil prices continued to reap gains in early Wednesday trading, amid concern in the markets about a supply shortage after Saudi Arabia and Russia extended their voluntary supply cuts until the end of the year.
On Tuesday, the Saudi Press Agency quoted an official at the Ministry of Energy that the Kingdom decided to extend its voluntary production cut by one million barrels per day for another three months, until the end of December 2023.
In a related context, Russian Deputy Prime Minister Alexander Novak said in a statement on Tuesday that Russia has extended its voluntary decision to reduce its oil exports by 300,000 barrels per day until the end of this year.
The Saudi and Russian voluntary cuts come in addition to the April cut agreed upon by a number of OPEC+ producers, which extends until the end of 2024.
The Saudi News Agency and Novak said that the two countries will review the reduction decisions monthly to study whether to increase the size of the reductions or increase production depending on market conditions.
Investors had expected Saudi Arabia and Russia to extend the voluntary cuts until October, but the three-month extension was unexpected.
