Oil rises as saudi signals opec cuts to continue

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Oil prices rise as Saudi signals OPEC cuts to continue

Oil prices surged on Monday after Saudi Arabia, the world's largest oil exporter, signaled that it will continue to cut production to support prices, despite growing concerns about the global economy.

Brent crude, the global benchmark, rose 2.4% to $63.50 per barrel, while West Texas Intermediate (WTI) crude, the US benchmark, gained 2.1% to $58.50 per barrel.

The price increase came after Saudi Energy Minister Prince Abdulaziz bin Salman said in an interview with Bloomberg that the kingdom will continue to reduce its production to support prices, despite the growing global economic uncertainty.

OPEC, the Organization of the Petroleum Exporting Countries, has been cutting production since 2018 to balance the market and support prices. The cartel, along with its allies, including Russia, has been reducing output by 1.2 million barrels per day (bpd) since January.

The Saudi minister's comments came as the global economy is facing growing concerns about a slowdown, with many countries experiencing a decline in economic growth. The International Monetary Fund (IMF) has cut its global growth forecast for 2023, citing trade tensions and monetary policy uncertainty.

Despite the concerns, oil prices have been supported by the ongoing supply cuts by OPEC and its allies, as well as the ongoing tensions in the Middle East, particularly between the US and Iran.

The price increase on Monday was also supported by a decline in US oil inventories, which fell by 2.1 million barrels last week, according to data from the Energy Information Administration (EIA).

Overall, the price increase on Monday suggests that oil markets remain tight, and that the supply cuts by OPEC and its allies are still supporting prices, despite the growing concerns about the global economy.