RIYADH: Oil prices were up nearly $1 a barrel on Monday after Saudi Arabia pledged to cut production by another 1 million barrels per day from July.
Brent crude futures were at $77.07 a barrel, up 94 cents, or 1.23 percent, at 9:05 a.m. Saudi time, while US West Texas Intermediate crude climbed 96 cents or 1.34 percent to $72.70 a barrel.
The contracts extended gains of over 2 percent on Friday after the Saudi energy ministry said the Kingdom’s output would drop to 9 million barrels per day in July from around 10 million bpd in May. The cut is Saudi Arabia’s biggest in years.
The voluntary cut pledged by Saudi on Sunday is on top of a broader deal by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to limit supply into 2024 as the group seeks to boost flagging oil prices.
OPEC+ pumps around 40 percent of the world’s crude and has cuts of 3.66 million bpd in place, amounting to 3.6 percent of global demand.
Russia fully enforces its oil output cuts, Novak says
Russian Deputy Prime Minister Alexander Novak told Rossiya-24 TV channel on Sunday following a meeting of the OPEC+ group that Russia is fulfilling its oil output cut obligations.
“The result of the discussions was the extension of the deal until the end of 2024,” Novak said.
Separately, Novak’s office said that Russia would tweak its crude oil production level to 9.828 million bpd from Jan. 1, and considering earlier announced additional voluntary reduction of 500,000 bpd, its output target will stand at around 9.3 million bpd.
Novak also said the market is more or less balanced, and demand is rising. However, the group would monitor interest rate decisions by global central banks, including the US Federal Reserve, for clues on the economy that could influence fuel consumption.
“That’s the indicator (interest rate decisions), which is having an impact on investments, on demand for oil and oil products,” he said.
Novak also said that OPEC+ could adjust its decisions if necessary.
He said the data from secondary sources related to the OPEC+ voluntary cuts starting from May would emerge in the middle of this month.
(With input from Reuters)
