Oil benchmarks are getting a slight boost after Russia suggested it could lower its supplies early next year in response to the G7’s price cap.
However, Brent’s reaction has been relatively muted thus far in light of such potentially “insignificant” cuts of between 500k-700k barrels a day, as suggested by Russian Deputy Prime Minister, Alexander Novak.
Still, the global oil benchmark remains on course for a second successive weekly gain of over 3%.
Russia’s output cut may help tighten oil markets in 2023 provided that China’s economic recovery is substantial enough to offset the recessions in the Western world.
The prospects of further supply interventions should keep oil prices supported, provided the demand outlook doesn’t further deteriorate in light of ongoing central bank rate hikes and China’s struggles to rein in Covid’s spread.