LONDON: Oil prices rose on Monday after top exporters Saudi Arabia and Russia reaffirmed their commitment to extra voluntary oil supply cuts until the end of the year.
Brent crude futures rose by $1.03, or 1.21 per cent, to reach $85.92 a barrel by 0834 GMT, while U.S. West Texas Intermediate crude was at $81.58 a barrel, up by $1.07, or 1.33 per cent.
Oil rebounded on Monday after Brent and WTI futures each experienced around a 6 per cent loss in the week ending November 3.
Saudi Arabia confirmed on Sunday that it would continue its additional voluntary cut of 1 million barrels per day (bpd) in December to maintain output at around 9 million bpd, as stated by a source at the Ministry of Energy.
Russia also announced that it would continue its additional voluntary supply cut of 300,000 bpd from its crude oil and petroleum product exports until the end of December.
ING analysts, in a note, mentioned that the oil market is expected to be in surplus in the first quarter of next year, "which may be enough to convince the Saudis and Russians to continue with cuts."
However, price gains could have been capped by a decrease in crude oil throughputs at Chinese refineries.
Refinery runs are decreasing from record levels in the third quarter due to eroding profit margins and a shortage of export quotas until the end of the year, according to sources cited by Reuters.
PVM analyst Tamas Varga noted, "The reaction to the Saudi/Russian decision over the weekend to extend their respective output and exports cuts throughout December has been, to some extent, countered by the anticipated fall in China’s refinery throughput this month."
Investors will be keeping an eye on more economic data from China after the world's second-largest oil consumer released disappointing October factory data last week. — Reuters
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