8% weekly oil gains, supported by the Russian production cut

Oil prices rose by more than 2% on Friday, with weekly gains 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 from the country.
Brent crude futures rose at the settlement by $1.89, or 2.2%, to $86.39 a barrel, and US West Texas Intermediate crude futures rose $1.66, or 2.1%, to $79.72. Brent achieved a weekly gain of 8.1%, while WTI rose 8.6%.
Russian Deputy Prime Minister Alexander Novak said: “Russia intends to reduce its production of crude oil in March by 500 thousand barrels per day, equivalent to about 5% of production.”
Western countries have imposed restrictions in an attempt to reduce Russia’s oil revenues because of the war in Ukraine. The production cut suggests that the EU’s latest price cap and embargo on Russian oil products, which took effect on February 5, is having some effect.
For her part, Rebecca Babin, chief energy dealer at CIBC Private Wealth US, said: “The estimates of most analysts are already based on a decrease in Russian production by between 700,000 and 900,000 barrels in 2023 … the key to an exit.” Crude oil from its current trading range is the recovery of Chinese demand.
Russia’s production last year contradicted expectations of a decline, but its oil sales will become more difficult to face the new sanctions.
Two delegates in «OPEC +» said that the group does not intend to take any action after Russia announced a reduction in oil production.
(Reuters)