Oil prices jump by $3/bbl after Russia suggests reduction in output owing to the price ceiling

Oil prices jump by $3/bbl after Russia suggests reduction in output owing to the price ceiling.

 

Oil prices rose almost $3 per barrel on Friday, marking the second week in a row of gains after Moscow warned it would decrease crude output in response to the G7 price ceiling on Russian exports.

 

Brent crude closed at $83.92, up $2.94 or 3.6%, while WTI crude in the United States settled at $79.56 a barrel, up $2.07 or 2.7%. Both indices posted their largest weekly advances since October.

 

Russia may reduce oil output by 5% to 7% in early 2023 in response to price limitations, Deputy Prime Minister Alexander Novak said on Friday, according to the RIA news agency.

 

According to traders and Reuters calculations, Russia’s Baltic oil exports could decline by 20% in December compared to the previous month after the European Union and G7 nations implemented sanctions and a price ceiling on Russian petroleum beginning on December 5.

 

‘The expected Russian cut could provide more fire to the bulls,’ said Eli Tesfaye, senior market strategist at RJO Futures. ‘If global demand remains at its current level, that cut might have a big impact, and we could remain in the $80s range.’