It is estimated that Saudi Arabia will continue with an additional oil production cut of 1 million barrels per day for July, also in August.
As global crude oil markets remain under pressure from economic concerns, Saudi Arabia is expected to unilaterally extend the 1 million barrels per day oil production cut for at least another month. The supply cut will take effect in July, with the possibility of an extension.
Sluggish demand in China has pushed crude oil prices closer to $75 a barrel, below what the kingdom needs to meet its budget.
Almost all investors and analysts surveyed by Bloomberg predict that the Saudi cut will continue into August. Several OPEC+ delegates also said that while the kingdom’s decisions are unpredictable, an extension seems likely.
Oil prices were expected to rise overall this year, but instead as China’s post-pandemic demand recovery disappointed and rising interest rates spread recession fears elsewhere, Wall Street forecasters such as Goldman Sachs and Morgan Stanley abandoned their forecasts of $100-per-barrel crude oil yields.