West Texas Intermediate traded near $87 a barrel after the twin announcements on Tuesday, which drove a 1.3% gain. While traders had anticipated the volume of the cuts, the duration was unexpected.
The strategy from Riyadh and Moscow will help to drain inventories further, while widening the market’s underlying timespreads. The gap between WTI’s two nearest December contracts has surged to the most since mid-2022.
Oil has rallied sharply this quarter after the Organization of Petroleum Exporting Countries and its allies adopted group- wide supply cuts that were then supplemented by additional, voluntary reductions. The production restraints have been implemented just as the International Energy Agency estimates that global crude consumption is running at a record pace.
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