Oil prices jump after Saudi Arabia vows to cut production again

Oil prices rose after Saudi Arabia said it would slash oil output by another 1 million barrels per day for at least a month starting in July as part of an effort by the OPEC+ group of leading producers to shore up crude prices.

“The Kingdom [of Saudi Arabia] will implement an additional voluntary cut in its production of crude oil, amounting to one million barrels per day, starting in July for a month that can be extended,” the state-owned Saudi Press Agency said Sunday.
The news sent oil prices immediately higher. In Monday morning Asian trade, Brent crude, the global benchmark, increased 1% to $76.9 per barrel, while WTI, the US benchmark, rose 1.2% to $72.6 per barrel.

The Saudi statement followed a meeting Sunday in Vienna of the alliance known as OPEC+, which includes members of the Organization of the Petroleum Exporting Countries (OPEC), Russia and other smaller producers.

At the meeting, Riyadh also agreed to extend a production cut of 500,000 barrels per day — announced in April — through 2024. Reuters, citing Russian Deputy Prime Minister Alexander Novak, reported that Moscow would extend its own production cut of 500,000 barrels per day through to the end of next year.

Other members of OPEC+ would also continue to curb output until the end of next year, Reuters reported.

The Saudi Ministry of Energy “explained that the Kingdom’s additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” the Saudi Press Agency added. (CNN)