Oil rises after Saudi Arabia's decision to extend voluntary production cut

Oil prices rose during Monday's trade after Saudi Arabia, the world's largest crude exporter, announced the extension of its voluntary production cut to August, dispelling the impact of fears of a slowing global economy and the prospects of the Federal Reserve raising interest rates.

Saudi Arabia will extend the voluntary cut in oil production by 1 million barrels per day (bpd) for another month in August.

Russian Deputy Prime Minister Alexander Novak announced on Monday that his country would reduce its oil exports by 500 thousand barrels per day (bpd) in August.

"As part of efforts to ensure that the oil market remains balanced, Russia will voluntarily reduce its oil supply in August by 500 thousand barrels per day by reducing that amount of its exports to global markets," he said in a statement.

In a Reuters poll in June, economists and analysts lowered their forecast for the average price of Brent crude in 2023 to $83.03 per barrel.

The growth of factory activity in China, the world's largest crude importer, also slowed in June as sentiment and employment slumped due to a slump in the market, according to a private sector survey from Caixin/S & P Global.

However, some analysts expect supply to shrink and prices to rise in the second half of the year after Saudi Arabia, the world's largest oil exporter, pledged to cut production by about 1 million barrels a day from July while the United States is gradually replenishing its strategic oil stockpile.

The latest Reuters survey showed that the Organization of the Petroleum Exporting Countries (OPEC) oil production fell only slightly in June, as increases in production in Iraq and Nigeria limited the impact of the cut from other producers.

Investors are awaiting a conference later this week hosted by OPEC to gain signs of supply.