Oil Prices Edge Higher on Russian Output Pledge

Oil prices are anticipated to increase following an upward trend since the start of the year. News about Russia, which is the second-biggest producer of crude in the world, achieving the target output cut as a pledge of its allegiance to OPEC, and the recent massive Venezuelan blackout, have surfaced.  These factors are expected to affect oil distributions, as well as future prices.

As of the time of writing, WTI Crude was at $60.02 with an increase of 0.13 percent. Brent was also up by 0.09 percent at $67.49, and the OPEC Basket was down by 0.72% at $66.19

Russia is on track to reaching its pledged output cut of 228,000 barrels a day by the end of this month. Energy Minister Alexander Novak said in Moscow that the country is going in that direction when asked if the October agreement is finally getting fulfilled.

A chief economist at Japan Oil, Gas and Metals National Corp. in Tokyo stated, “Russia is making good on its promise.”

 “Investors are becoming more confident they can trust Russia’s relationship with Saudi Arabia, and supply disruptions in Venezuela are raising concerns the market will tighten further,” he added.

Venezuela’s export endeavors remained shut due to a massive power outage; the second one for the month. The South American country, which is perceived to be home to the largest oil reserves in the world, suffered another wide-scale blackout, accounting for its hyperinflation rates.

This led to the ports of Jose and Puerto La Cruz, which are responsible for about 89 to 90 percent of the country’s crude trade and exports, to stop operations for the day. Nicolás Maduro, disputed president of Venezuela, puts the blame on the United States for the outage, but the White House continues to deny responsibility.

The OPEC and other contributors, as well as the United States’ sanctions on exports from Venezuela and Iran, have caused oil prices to rise for about 25 percent this year. U.S. crude inventories rose 1.93 million barrels last week.

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