Consensus forms behind rising crude prices

Saudi cuts and slowing US output add to improved demand outlook

Crude oil prices rose by c.14% in July, and a consensus seems to have formed among analysts and observers that prices are likely to continue to rise over the rest of the year. The July increase appeared largely a response to the latest round of cuts by OPEC+ countries, most notably Saudi Arabia, which implemented a new cut of 1m b/d effective from 1 July. Prices pulled back by about 2% on 2 August after ratings agency Fitch downgraded US debt from AAA to AA, but the ground was regained the day after when Saudi officials announced they would extend the 1m b/d cut to at least the end of September. Combined with an array of other market factors, Saudi Arabia’s renewed commitment appears to set