Brent may rise toward $100/bbl as Saudi output cut could worsen supply gap: analysts

Brent may rise toward $100/bbl as Saudi output cut could worsen supply gap: analysts

SINGAPORE: A global shortfall in crude oil supply is set to deepen in the third quarter as the world's top exporter Saudi Arabia pledged extra output cuts from July in a move likely to push Brent towards $100 a barrel by the end of the year, analysts said.

Oil prices jumped more than $1 a barrel on Monday as the Saudi energy ministry said on Sunday its output would drop to 9 million barrels per day (bpd) in July from around 10 million bpd in May, the kingdom's biggest reduction in years.

The voluntary cut pledged by Saudi is on top of a broader deal by the Organization of the Petroleum Exporting Countries and their allies including Russia to extend production cuts into 2024 as the group seeks to boost flagging oil prices.

"Saudi Arabia has a track record of delivering on material cuts," RBC Capital's Helima Croft said in a note.

"Hence, we would expect the full 1 million bpd unilateral cut to hit the market in July, nearly doubling the true physical reduction we have seen from the producer group since October."

The move has paved the way to tighter supplies and put a $70 a barrel floor under prices, analysts said, however