Russia will reduce its crude oil production by 500,000 barrels a day by the next month

crude oil

Russia will reduce its crude oil production by 500,000 barrels a day by the next month

It’s been an entire year since the Russian invasion of Ukraine, and the tension since then has extended between the Russian camp and the Western camp. The U.S. and its allies imposed a series of economic sanctions to punish Russia for its military operation.

The most recent sanction imposed was crude oil price caps, which Russia interpreted as an aggressive act. By Friday’s opening trading hours, oil prices had jumped higher after the Rissia announcement. The announcement includes the possibility that Russia might start reducing its oil daily production volume by next month.

Russia’s prime minister, Alexander Novak, noted last month that his country might reduce oil production by an estimated 5–7% in 2023. Novak confirmed the same thing in its latest interviews. Experts are positive that Russia will reduce its daily oil production by 500.00 barrels, which counts as 5%.

Wall Street’s reaction to the news was mixed; oil prices jumped in all main indexes after cooling down in Thursday’s session. Crude oil in West Texas Intermediate rose by 1,63% to $79 per barrel. Oil prices in Bernt increased by 1.8% to $86,06 per barrel. Natural gas prices rose by 3,42%, posting the highest price increase in natural gas prices for the week.

Wall Street’s main indexes delivered mixed gains by the mid-day trading hours. The Dow feature rose by 0,23%, to end the weekend with low gains. The Nasdaq index fell by 0.95 percent amid fears of a market supply crisis. Fears of a market recession had led to a sharp increase in the stock market’s volatility. The hawkish commentary of the U.S. Federal Reserve is putting pressure on the S&P 500 and the Dow growth stocks.

According to various reports, eight of the S&P’s 11 major sectors have declined. rising red flags and boosting the market’s recession probabilities. That said, the stock market is only one bad decision away from crashing.

The S&P 500 benchmark declined by 0.05% to end the weekend with another weekly low. Analysis was a little surprised by the stock market’s reaction to the news. Most experts agree that the price cap sanction against Russia might lead to an unfortunate reaction.

By cutting oil production by 5% daily, Russia might cause an energy supply market crisis, and that might lead to a market recession, at least in Europe.

Meanwhile, the economic outlook for China is improving. The world’s second-largest economy and one of the largest energy-market economies are showing signs of rebound and recovery. Last month, China decided to open its borders to foreign visitors; the decision was well-calculated despite health concerns.

With everything going on, the market remains fragile, especially with the Federal Reserve of the United States being hawkish. According to Tuesday’s newsletter, FED officials intend to be more hawkish for the rest of the year. Experts see that this year’s interest rate hikes will be less aggressive compared to last year, yet remain relatively high for small businesses and growth stocks.

Written by Editor

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