Oil traded little changed after erasing most of the gains that followed Saudi Arabia’s surprise pledge to cut more production as persistent economic uncertainty weighs on the outlook for demand.
(Bloomberg) — Oil traded little changed after erasing most of the gains that followed Saudi Arabia’s surprise pledge to cut more production as persistent economic uncertainty weighs on the outlook for demand.
West Texas Intermediate teetered between slim gains and losses after Monday’s short-lived surge following the Saudi announcement over the weekend. Further along the futures curve, WTI prices for December 2023 and 2024 contracts fell from Friday’s close, evidence that traders aren’t concerned about supplies in the longterm.
Saudi Arabia’s production cuts “will take some supply off the market, but demand will need to continue to rise if we are to see much higher prices,” said Dennis Kissler, senior vice president of trading at BOK Financial Securities.
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Saudi Arabia followed its move to cut output in July with an increase to its crude prices for the same month. That’s pushing some Asian refiners to consider buying more crude from other suppliers, including Russia.
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