Oil prices rose more than 2% in Friday’s session, with a weekly gain of more than 8%, as Russia announced plans to cut oil production next month after the West imposed a ceiling on crude oil and fuel prices in the country.
Brent futures rose $1.89, or 2.2%, to $86.39 a barrel. West Texas Intermediate crude futures rose about $1.66, or 2.1%, to $79.72.
Weekly gain of Brent was 8.1%, while WTI rose by 8.6%.
Yesterday, Friday, Russian Deputy Prime Minister Alexander Novak said that Russia intends to reduce crude oil production in March by 500 thousand barrels per day, which is equivalent to about 5% of production.
Western countries have imposed restrictions in an attempt to cut Russia’s oil revenues in response to the country’s actions in Ukraine. The production cuts suggest that the recent price cuts and the European Union’s embargo on Russian oil products, which came into effect on February 5, are having some impact.
“Most analysts’ estimates are already based on a 700,000-900,000 bbl reduction in Russian production in 2023… the key to getting crude oil out of its current trading range is a recovery in Chinese demand.”
Russia’s production fell short of expectations last year, but its oil sales will find it harder to resist the new sanctions.
Two delegates to OPEC+ told Reuters that the group did not intend to take any action after Russia announced it would cut oil production.
