OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, has already been cutting supply to boost prices since November last year due to weaker Chinese demand and rising U.S. supply but so far has failed to move them much from a range of $70-$80 a barrel.
Shortly after the Saudi announcement, Russian Deputy Prime Minister Alexander Novak said Moscow would cut its oil exports by 500,000 barrels per day in August.
The cuts amount to 1.5% of global supply and bring the total pledged by OPEC+ to 5.16 million bpd.
Later on Monday, Algeria said it would cut oil output by an extra 20,000 barrels from Aug. 1-31 to support efforts by Saudi Arabia and Russia to balance and stabilise oil markets, its energy ministry said.
The voluntary cut will be on top of a 48,000 barrel reduction decided in April, it said.
Libyan Oil Minister Mohamed Oun said his country welcomed the Saudi decision which will have “positive impact on market balance between global producers, consumers, and on global economy”.
Brent crude futures were up 0.6%, or 43 cents, at $75.84 a barrel by 11:52 a.m. EDT (1652 GMT). U.S. West Texas Intermediate crude rose 0.6%, or 39 cents, to $71.03. During Friday’s session, Brent 0.8% and WTI rose 1.1%.
Saudi Arabia, the de-facto leader of OPEC, had pledged earlier this month to make a deep cut to its output in July, on top of the broader OPEC+ deal to limit supply into 2024 as the group sought to boost flagging oil prices.
“The kingdom’s production for the month of August 2023 will be approximately 9 million barrels per day,” Saudi state news agency SPA quoted an official source from the Ministry of Energy as saying.
Russia, the world’s second largest oil exporter after Saudi Arabia, has already pledged to reduce its output by 500,000 barrels per day (bpd) to 9.5 million bpd from March until year-end.
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