Oil Posts Third Monthly Gain as OPEC+ Announces Further Cuts

Oil rose for a sixth session, buoyed by risk-on sentiment and news that Russia had agreed on further OPEC+ cuts.

(Bloomberg) — Oil rose for a sixth session, buoyed by risk-on sentiment and news that Russia had agreed on further OPEC+ cuts.

Although thin summer liquidity has kept the commodity tethered to broader markets, tightening physical supplies are supporting prices, with West Texas Intermediate posting a third monthly rise.

Russia’s announcement that it would further curb exports comes as US crude inventories have declined to the lowest since December. WTI’s prompt spread strengthened to 66 cents in backwardation, up sharply from 25 cents a week ago.

Russia in Talks With OPEC+ on Extending Oil-Export Cuts (2)

Crude is about 3% higher year-to-date as major OPEC+ producers curtail supply, and the cartel is expected to roll those cuts into October. Yet recent headwinds to crude include lingering expectations that the Fed isn’t done tightening interest rates and slowed economic growth in China.

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