Brent crude reached $56.75 a barrel this week, its highest level since last February. Saudi Arabia’s announcement last week that it will cut output by one million barrels per day (mbpd) from February gave crude its best week in four months; Brent is already up by more than 8% since the start of the year.
Saudi Arabia and Russia, the two-leading producers in the Opec+ cartel, have spent much of the past year squabbling about how to respond to the Covid-19 crisis, says Oilprice.com. The Saudis have consistently favoured supply cuts in order to keep prices high, while the Russians argue that strategy will just hand profits over to US shale producers (who operate independently of Opec+). Saudi Arabia’s unilateral cut ends the group’s focus on sharing output curbs equally, with Russia and Kazakhstan set to raise output by 75,000bpd from next month.
Oil markets had a bout of the “hebee-jeebies” earlier this week as parts of China moved back into lockdown, says Stephen Innes of Axi. A durable drop in Chinese activity is a key risk to oil markets. Nevertheless, the scale of the Saudi output cuts provides a decent cushion against bad news. US political developments are also keeping traders optimistic: Democrat control of the Senate means more regulation of US shale producers is likely, which could put a lid on US production. “Risks remain”, but there could be more upside to come.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
ONS: UK house prices hit by September slump amid Autumn Budget uncertaintyThe latest Land Registry data shows Budget rumours are hitting the UK housing market
-
Young pension savers expect to ‘need £100,000 plus a year’ for a good retirementSome under 40s are aiming high for their pensions, reckoning they will need a pot big enough to generate six figures a year in retirement income, according to new research. Those much closer to taking their pension expect to need far less.
-
Who is Jared Isaacman, SpaceX astronaut and Trump's pick as NASA chief?Jared Isaacman is a close ally of Elon Musk and the first non-professional astronaut to walk in space. Now, he is in charge of NASA
-
Three solid British stocks going cheapOpinion Ian Lance and Nick Purves, fund managers at Temple Bar Investment Trust, highlight three British stocks with strong cash flows and robust balance sheets
-
Is now a good time to invest in Barclays?Barclays' profit growth is healthy, and the stock is cheap compared with its rivals
-
Profit from other investors’ trades with CME GroupCME Group is one of the world’s largest exchanges, which gives it a significant competitive advantage
-
Key lessons from the MoneyWeek Wealth Summit 2025: focus on safety, value and growthOur annual MoneyWeek Wealth Summit featured a wide array of experts and ideas, and celebrated 25 years of MoneyWeek
-
Defeat into victory: the key to Next CEO Simon Wolfson's successOpinion Next CEO Simon Wolfson claims he owes his success to a book on military strategy in World War II. What lessons does it hold, and how did he apply them to Next?
-
Aircraft leasing companies can lift investors' portfoliosThe aircraft leasing business is a safer way to cash in on air travel and its booming demand. David Prosser explains how it works and how to access it
-
8 of the best houses for sale with fishing rightsThe best houses for sale with fishing rights – from a Georgian property on the banks of the River Derwent, County Durham, to a restored mill house in Marlborough with fishing rights on the River Kennet
