Oil prices on the rise, jump more than $2 a barrel following production cuts

Oil prices on the rise, jump more than $2 a barrel following production cuts

Oil prices jumped more than $2 a barrel in early Asian trade on Monday, hours after the world’s top exporter Saudi Arabia pledged to cut production by another 1 million barrels per day from July.

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Brent crude futures was at $78.42 a barrel, up $2.29, or 3 percent, at 2219 GMT after earlier hitting a session-high of $78.73 a barrel.

US West Texas Intermediate crude climbed $2.27 a barrel, up 3.2 percent, or $74.01 a barrel, after touching an intraday high of $75.06 a barrel.

Saudi Arabia’s output would drop to 9 million barrels per day (bpd) in July from around 10 million bpd in May, the biggest reduction in years, its energy ministry said in a statement.

The voluntary cut pledged by Saudi is on top of a broader deal by the Organization of the Petroleum Exporting Countries and their allies including Russia to limit supply into 2024 as the group seeks to boost flagging oil prices.

The group, known as OPEC+, pumps around 40 percent of the world’s crude and has in place cuts of 3.66 million bpd, amounting to 3.6 percent of global demand.

“The move by Saudi Arabia is