An Opec+ ministerial panel which met on Friday made no changes to the group’s current oil output policy after a Saudi decision to extend its voluntary production cut into September helped oil prices rally further.

The panel, called the Joint Ministerial Monitoring Committee, can call for a full meeting of the Organization of the Petroleum Exporting Countries (Opec) and allies led by Russia, known as Opec+, if warranted.

Oil prices rose more than 14% in July compared with June, the biggest monthly percentage increase since January last year, as tighter supply and rising demand outweighed concern that interest rate hikes and stubborn inflation could hit economic growth.

“The committee will continue to closely assess market conditions,” an Opec statement issued after the online meeting said, adding that the panel urged members to achieve full compliance with output cut pledges.

On Thursday, Opec leader Saudi Arabia said it will extend a voluntary oil output cut of one million barrels per day (bpd) for another month to include September, adding it could be extended beyond that or deepened. Oil prices on Friday traded at nearly $86 a barrel, close to their highest since mid-April.

Russia will also cut oil exports by 300,000 bpd in September, Deputy Prime Minister Alexander Novak said shortly after the Saudi announcement.

Opec member Algeria, which announced an additional voluntary cut of 20,000 bpd for August, is yet to decide whether to extend the cut into September, a source with knowledge of the matter told Reuters.

Opec+ agreed on a broad deal to limit supply into 2024 at its last policy meeting in June, and Saudi Arabia pledged a voluntary production cut for July that it extended to include August.

The group’s output cuts, excluding the additional voluntary reductions from the three producers, amount to 3.66 million bpd, roughly 3.6% of global demand.

The JMMC will hold its next meeting on Oct. 4.

 Oil prices rose about 1% on Friday and were on track for a sixth consecutive week of gains after Saudi Arabia and Russia, the world’s second and third-largest crude producers, pledged to extend supply cuts through September.

Brent crude futures rose 74 cents, or 0.9%, to $85.88 a barrel. US West Texas Intermediate crude gained 72 cents, or 0.9%, to $82.27 a barrel.

Both benchmarks were set for their longest streak of weekly gains this year. Brent has risen more than 16% and WTI by over 19% during the last six weeks.

Saudi Arabia on Thursday extended a voluntary oil production cut of 1 million barrels per day (bpd) to the end of September, keeping the door open for another extension. Russia has also elected to reduce its oil exports by 300,000 bpd next month.

“With the production cut extended, we anticipate a market deficit of more than 1.5 million barrels per day (bpd) in September, following an estimated deficit of around 2 million bpd in July and August,” UBS analysts wrote in a note.

On the demand front, global oil consumption could grow by 2.4 million bpd this year, Russian Deputy Prime Minister Alexander Novak

said on Friday

 The panel noted that it could take additional measures at any time, which could mean additional cuts if market conditions worsen, the UBS note added.

UBS said it expects Brent prices to trade in the $85 to $90 per barrel range over the coming months.

Weighing on oil prices, data released on Friday showed the U.S. economy maintained a moderate pace of job growth in July, but solid wage gains and a decline in the unemployment rate pointed to continued tightness in labor market conditions.

Additionally, the downturn in euro zone business activity worsened more than initially thought in July and the Bank of England raised its interest rate to a 15-year peak on Thursday.

Global oil demand is set to grow by 2.4 million barrels per day this year, and strong demand makes the market balanced, Russian Deputy Prime Minister Alexander Novak said on Friday.

Russian oil output remains steady at about 9.5 million barrels per day, he said after a meeting of the joint monitoring committee of OPEC and non-OPEC producers.

“Russia is fully committed to the agreements that had been reached, and generally, within OPEC+ we are in full compliance with our obligations,” Novak told Russian state television.

Saudi Arabia and Russia made additional pledges outside the OPEC+ agreement this week to support crude prices.

“Today the market is stable in our view,” Novak said. “The prices are at an acceptable level. Thanks to the measures taken by OPEC+, including Russia, the balance of supply and demand is being maintained.”

Reuters