RBC Capital Markets argues that the Saudi cut may not impact global production much. “Russia will be able to benefit from [the] price move, especially as it will be allowed to increase output by 75,000 barrels per day in combination with Kazakhstan.”
In the first week of 2021, a triple whammy caused a surge in crude oil prices, with North Sea Brent rising to US$70.73 per barrel ($93 per barrel) initially on Jan 6, the commodity’s highest level since Sept 2020, but fell back to US$53 per barrel during the afternoon in London. As at Jan 7, North Sea Brent is at US$54.43 per barrel.
Firmer 10-year US treasury yields, concerns over an Iranian retaliation for the murder of Qasem Suleimani a year ago by the Trump administration against a backdrop of chaos in the US Capitol, and news that Saudi Arabia will cut production by 1 million barrels per day voluntarily in February and March this year caused the jump in North Sea Brent.
