Search
Close this search box.
Oil Soars above $90 As Saudi Arabia Extends Deep Output Cuts
Saudi Arabia
Oil Soars above $90 As Saudi Arabia Extends Deep Output Cuts
– By Chigozie Ikpo

       Share 

Facebook
Twitter
LinkedIn
WhatsApp

Oil Soars above $90 As Saudi Arabia Extends Deep Output Cuts

Saudi Arabia will extend its voluntary 1 million bpd crude oil production cut through the end of this year, according to the official Saudi Press Agency.

This brings Saudi Arabia’s targeted crude oil production to 9 million bpd for the remainder of the year. However, the extension will still be reviewed monthly, media reported on Tuesday afternoon.

Oil markets have been guessing how OPEC will proceed with its oil production strategy—with Russia and Saudi Arabia’s role in OPEC’s plan taking the top spot of concern. Market analysts routinely pick oil price points that would trigger additional action by Saudi Arabia. Currently, Brent crude oil is trading at just below $90 per barrel, at $90.57 at 9:35 am ET, up $0.96 (+1.08%) on the day. Brent crude has shot up $6 per barrel over the last month.

As Saudi Arabia plans to extend the production cut and the market has a chance to digest Saudi Arabia’s announcement, further oil price moves are to be expected.

Related Posts

The question now is whether this move should be viewed through a bullish or bearish lens. While production cuts from Saudi Arabia could be seen as bullish in restricting global oil supplies, the bears are quick to point out that this means Saudi Arabia does not see China’s crude oil demand rising enough to warrant loosening the reins on its current production cut strategy.

Originally, Saudi Arabia had proposed the additional 1 million bpd supply cut—a voluntary supply cut–as a July-only event. Later, however, Saudi Arabia extended the production cut into August and September. The cut is not required as part of the deal reached with its OPEC and OPEC+ groups, rather it is in addition to the OPEC mandates.

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Newsletter

Get to read our latest stories right in your email

Show some Love. Share this post

Copyright 2022. All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from Majorwaves Energy Report

Show Buttons
Hide Buttons