Crude oil futures traded higher on Monday morning as Saudi Arabia and Russia reaffirmed their decision to stick to extra voluntary oil output cuts till December.

At 9.53 a.m. on Monday, January Brent oil futures were at $85.27, up by 0.47 per cent, and December crude oil futures on WTI (West Texas Intermediate) were at $80.97, up by 0.57 per cent.

November crude oil futures were trading at ₹6,748 on the Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6,696, up by 0.78 per cent, and December futures were trading at ₹6,746 as against the previous close of ₹6,702, up by 0.66 per cent.

Review next month

Saudi Press Agency (SPA), which quoted an official source from the Saudi Ministry of Energy, said the Kingdom of Saudi Arabia will continue the voluntary cut of one million barrels a day, which went into implementation in July 2023 and was extended until the end of December 2023. Thus, the Kingdom’s production in the month of December 2023 will be approximately 9 million barrels a day, it said.

SPA report said this voluntary cut decision will be reviewed next month to consider extending the cut, deepening the cut, or increasing production. The source also noted that this cut is in addition to the voluntary cut previously announced by the Kingdom in April 2023, which extends until the end of December 2024.

The source confirmed that 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.

Meanwhile, Russian news agency TASS, which quoted the Russian Deputy Prime Minister Alexander Novak, said Russia will continue additional voluntary decrease of supplies of its oil and oil products to global markets by 300,000 barrels a day, which came into effect in September and October 2023, until late December 2023.

This measure supplements the voluntary oil production cut of 500,000 barrels a day that was announced by Russia in April 2023 and will stay in place until late December 2024.

Novak said a market analysis will be done next month to make a decision on whether to continue oil production cuts or increase oil production.

In another development, the US House of Representatives on Friday passed a bill to increase sanctions on Iran. This would impose measures on foreign ports and refineries that process petroleum exported from Iran in violation of US sanctions. This bill must be passed by the US Senate and signed by the US President before becoming law.

Jeera gains, castor seed slips

November natural gas futures were trading at ₹282.80 on MCX against the previous close of ₹292, down by 3.15 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), November jeera contracts were trading at ₹41,295 against the previous close of ₹40,140, up by 2.88 per cent.

November castor seed futures were trading at ₹5,743 on NCDEX against the previous close of ₹5,815, down by 1.24 per cent.