Oil prices rise as Saudi Arabia and Russia cut production, Chevron's Australian plant resumes full operations

September 18, 2023 06:16 AM PDT | By Investing

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Oil prices rise as Saudi Arabia and Russia cut production, Chevron's Australian plant resumes full operations — Image source: Kalkine Media

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Global oil prices have surged to their highest levels since November due to ongoing production cuts by Saudi Arabia and Russia, two of the world's largest oil producers. The international benchmark Brent Crude rose by 0.3% to reach $94.25 per barrel on Monday, marking its fourth consecutive week of gains. Simultaneously, the U.S. benchmark, West Texas Intermediate (WTI), saw an increase of 0.4%, hitting $91.17 a barrel.

The coordinated production cuts are expected to limit supply availability in the coming months. This reduction, paired with signs of an economic rebound in China following recent stimulus measures, could further boost global demand for oil and subsequently push prices higher.

The Federal Reserve is closely monitoring these escalating energy costs ahead of its interest rate decision this week. The uptick in fuel prices could sustain inflation at higher than usual levels, potentially leading policymakers to keep interest rates elevated. While this may help control inflation, it might also hamper economic growth.

In related news, Chevron (NYSE:CVX) announced on Monday that its Wheatstone natural gas plant in Australia has returned to full production after being affected by worker strikes last week. The plant, along with the nearby Gorgon facility, contributes approximately 5% to the global supply of liquid natural gas (LNG). Despite the recent disruptions, Chevron confirmed that the strikes would not impact the overall output from these facilities.

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This article first appeared in Investing.com

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