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Saudi Arabia and Russia, the world’s biggest oil exporters, deepened oil cuts on Monday, sending prices higher despite concerns over a global economic slowdown and possible further interest rate increases from the U.S. Federal Reserve.

OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, has already been cutting supply to boost prices since November last year due to weaker Chinese demand and rising U.S. supply but so far has failed to move them much from a range of $70-$80 a barrel.

Saudi Arabia said it would extend its voluntary oil output cut of one million barrels per day (bpd) for another month to include August, adding that the cut could be extended beyond that month.

Shortly after the Saudi announcement, Russian Deputy Prime Minister Alexander Novak said Moscow would cut its oil exports by 500,000 barrels per day in August.

The cuts amount to 1.5 per cent of global supply and bring the total pledged by OPEC+ to 5.16 million bpd.

Later on Monday, Algeria said it would cut oil output by an extra 20,000 barrels from Aug. 1-31 to support efforts by Saudi Arabia and Russia to balance and stabilize oil markets, its energy ministry said.

The voluntary cut will be on top of a 48,000 barrel reduction decided in April, it said.

Libyan Oil Minister Mohamed Oun said his country welcomed the Saudi decision which will have “positive impact on market balance between global producers, consumers, and on global economy.”

OPEC+, which pumps around 40 per cent of the world’s crude oil, already has in place cuts of 3.66 million bpd, amounting to 3.6 per cent of global demand, including 2 million bpd agreed last year and voluntary cuts of 1.66 million bpd agreed in April and extended to December 2024.

Brent crude futures were up 0.6 per cent, or 43 cents, at $75.84 a barrel by 11:52 a.m. EDT (1652 GMT). U.S. West Texas Intermediate crude rose 0.6 per cent, or 39 cents, to $71.03. During Friday’s session, Brent 0.8 per cent and WTI rose 1.1 per cent.

Saudi Arabia, the de-facto leader of OPEC, had pledged earlier this month to make a deep cut to its output in July, on top of the broader OPEC+ deal to limit supply into 2024 as the group sought to boost flagging oil prices.

“The kingdom’s production for the month of August 2023 will be approximately 9 million barrels per day,” Saudi state news agency SPA quoted an official source from the Ministry of Energy as saying.

“This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” the SPA official source was quoted as saying.

Russia, the world’s second largest oil exporter after Saudi Arabia, has already pledged to reduce its output by 500,000 barrels per day (bpd) to 9.5 million bpd from March until year-end.

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