Oil prices jump on Saudi output cut

Oil prices jump on Saudi output cut

Opec+ agreed on Sunday to continue current output cuts until the end of next year

A view of oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia. — Reuters

By AFP Published: Mon 5 Jun 2023, 8:53 PM

Oil rallied on Monday after key producer Saudi Arabia slashed output by a million barrels in a bid to prop up prices, while fellow Opec+ members agreed to continue current cuts to 2024.

International benchmark Brent oil and US counterpart WTI crude won more than two per cent before pairing gains. Brent was up 1.6 per cent at $77.35 per barrel, while West Texas Intermediate gained 1.5 per cent at $72.82 per barrel.

“The outcome of the much-anticipated Opec+ meeting has created a splash in the oil market, if not a wave,” said KCM Trade analyst Tim Waterer.

“Saudi Arabia has backed up their words with actions by going it alone and extending their supply cuts.”

The 23-nation Opec+ alliance, which includes Russia, agreed on Sunday to continue current output cuts until the end of next year.

But Saudi Arabia also announced its own new cutback taking July production to nine million barrels per day. Saudi Energy Minister Prince Abdulaziz bin Salman told reporters that he “will do