Oil prices spike after low output, supply chain concerns

Oil prices increased on Monday over tight global supply concerns after lower output from OPEC+ countries, Saudi Arabia and Russia.

International benchmark Brent crude traded at $85.45 per barrel at 10.28 a.m. local time (0728 GMT), a 0.77% rise from the closing price on Friday of $84.80 per barrel.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $81.31 per barrel, up 0.81% from the sessionclose of $80.66 per barrel.

Both benchmarks posted significant losses last week over fears of a slowdown in economic growth in China and the expectation of further interest rate hikes in the US

However, tight global supply concerns again underpinned price increases on Monday.

OPEC+ crude exports are expected to fall for a second month in August after production cuts from Russia and Saudi Arabia.

Earlier this month, Saudi Arabia stated that it would extend its existing output cutbacks of 1 million barrels per day (bpd) through September. The country originally reduced output in July and extended it through August.

Likewise, Russia announced it would continue to voluntarily reduce oil exports. It said it would reduce exports by 500,000 bpd in August and cut 300,000 bpd in September.

Meanwhile, the oil rig count in the US decreased by five last week, according to the latest data released by oilfield services company Baker Hughes on Friday.

The number of oil rigs, an indicator of short-term production in the country, fell to 520 for the week ending Aug. 18. The number of US oil rigs declined by 81 compared to one year ago.

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