Oil prices soar after Saudi Arabia unilaterally reduces production further

Oil prices soar after Saudi Arabia unilaterally reduces production further

Jun 05, 2023

Riyadh [Saudi Arabia], June 5: Oil prices in the early trading session of June 5 in the Asian market jumped after the decision of Saudi Arabia.
CNBC on June 5 reported that oil prices spiked after Saudi Arabia's decision to cut another 1 million barrels per day.
Earlier, on June 4, the Organization of the Petroleum Exporting Countries (OPEC) and its partner, commonly known as the OPEC+ group, decided not to further reduce oil production this year. However, Saudi Arabia , the leading country of OPEC + announced that it would do it itself.
Specifically, Saudi Arabia's Energy Ministry said that its output will fall to 9 million bpd in July, from about 10 million bpd in May. This is the biggest drop in years, is believed to be a step to push oil prices back up, according to Reuters news agency.
Immediately after the announcement, contracts to buy Brent crude rose 2.4% to $78 a barrel in early Asian trading on June 5, while West Texas Intermediate oil prices rose 2.5%, to $73.53/barrel.
"The market is not expecting much from the country's decision to unilaterally cut output by 1 million barrels per day," said Bob McNally, president of Rapidan Energy, a US energy group. .
"It proves once again that Saudi Arabia is willing to act unilaterally to stabilize oil prices," McNally said, recalling the oil giant's unilateral cut in output by 1 million barrels per day in June. January 1, 2021.
From 2022 to now, OPEC+ has cut 3.66 million bpd of oil, equivalent to 3.6% of global demand, including 2 million bpd that the bloc agreed to in October 2022 and a voluntary reduction of 1 .66 million bpd was approved in April. Those cuts were in effect until the end of 2023 but on June 4, OPEC+ agreed to extend it until the end of 2024.
Source: ThanhNien Newspaper