Oil rises on news of Saudi Arabia cutting output
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Benchmark oil prices rose on Monday after Saudi Arabia announced its own production cut of 1 million barrels per day in July at the end of a meeting of oil exporting countries.
It is reported Bloomberg.
After jumping 4.6%, WTI crude for July delivery was somewhat flat and rose 1.3% to 72.67 a barrel. Brent for August delivery rose 1.2% to $77.01 per barrel.
Saudi Arabia’s 1 million b/d output cut would result in the lowest production level in several years after falling prices.
The reason for such a decision is that last month oil fell by 11% in New York trading due to fears about the economic recovery in the world, primarily in China, and therefore about the demand for oil.
While other members of the group have pledged to maintain existing cuts until the end of 2024, Russia has made no commitment to cut production further, and the United Arab Emirates has secured a higher production quota for next year. So Saudi Arabia could potentially sacrifice its market share in order to stabilize it.
Most market watchers, including Goldman Sachs, expected OPEC+ to keep production at previous levels. Next month, the additional reduction may be extended.
We will remind:
The OPEC group has banned several media groups from attending its production meeting in Vienna this weekend. This step was initiated by Saudi Arabia, which is trying to support oil prices.
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