The price of Texas intermediate oil (WTI, in English) rose 0.6% on Monday and closed at US$72.15 a barrel after Saudi Arabia announced yesterday that it is willing to reduce its crude production for the third time in less than a year.
At the close of business in NYa barrel of WTI for July delivery gained US$0.41 compared to the previous day’s close.
The Saudi Minister of Energy, Abdelaziz bin Salmanannounced a cut of one million barrels per day starting in July at a press conference in Vienna, after a conference of the alliance formed by the Organization of the Petroleum Exporting Countries (OPEC) and ten other nations, including Russia.
He also made it clear that it is a additional and “voluntary” cutting those that it has already implemented in recent months as part of the pacts closed by the oil alliance.
For his part, the Russian Deputy Prime Minister, Alexander Novakconfirmed after the Viennese meeting that his country will also extend the committed limitation of its pumping.
“Russia will prolong its voluntary cuts in 500,000 barrels until the end of 2024 as a precautionary measure in coordination with the OPEC+ countries,” Novak told Russian public television from Vienna.
The ministers of the oil countries specified in their final declaration that they have reached a compromise on the internal distribution of the production quota as of January 1, 2024.
“It became clear last week that Saudi Arabia was going to push for a cut at the weekend meeting and that getting others on board could prove difficult. It turns out that the compromise reached in a spirit of unity and cooperation is far from convincing,” Oanda analyst Craig Erlam said today.
For Erlam, it is “a unilateral measure by Saudi Arabia disguised as an OPEC+ cut.”
On the other hand, natural gas futures contracts for July added US$0.07 to US$2.24, and gasoline futures due the same month lost US$0.02 to US$2.52.