Saudis extend voluntary oil production cut again: ‘focus more on natural gas’

on Sep 5, 2023
Updated: Sep 10, 2023
  • Saudi Arabia to extend its voluntary oil production cut to three more months.
  • Rob Thummel explains how to play the energy space in this environment.
  • Oil is approaching $88 a barrel today following the update from the Kingdom.

Follow Invezz on Telegram, Twitter, and Google News for instant updates >

Oil is approaching $88 a barrel today after Saudi Arabia announced plans of extending its voluntary production cut through the remainder of this year.

How to play the energy space in this environment

Copy link to section

The Kingdom will continue to produce 1.0 million barrels a day less of oil over the next three months, as per the Saudi Press Agency.

  • Save

That’s on top of 1.66 million barrels per day of voluntary cuts that a few of the other OPEC members plan on keeping in place until the start of 2025. Explaining how to play the energy space in this environment, Rob Thummel of Tortoise Ecofin said today:

We look at energy as an essential sector. We focus on companies that benefit from rising demand that’s driven by GDP growth – like energy infrastructure companies.

He’s particularly bullish on the energy infrastructure companies as many of them pay a solid dividend yield as well.

  • Save

Oil vs natural gas: Rob Thummel picks a side

Copy link to section

Note that Russia will export 300,000 barrels less of oil in September. On Tuesday, its Deputy Prime Minister Alexander Novak also said that exports will voluntarily remain down by that much in the remaining three months of this year.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

Still, Tortoise’s Thummel favoured natural gas over oil for investment this morning on CNBC’s “Squawk on the Street”:

We have shifted to focus more on natural gas. Nobody talks about peak natural gas demand and won’t for a long time. It’s decarbonising [and] growth potential going forward is tremendous.

China’s oil giant Sinopec recently said that the domestic gasoline demand has already seen its peak. UNG – the United States Natural Gas Fund is currently down about 50% versus its year-to-date high.  

  • Save

Copy expert traders easily with eToro. Invest in stocks like Tesla & Apple. Instantly trade ETFs like FTSE 100 & S&P 500. Sign-up in minutes.

  • Save

77% of retail CFD accounts lose money.

  • Save