London
CNN
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Saudi Arabia announced Monday that it would extend a cut of 1 million barrels a day in its oil production at least until the end of August.
The cut, which took effect on Saturday, was initially planned to last for the month of July in an attempt to shore up oil prices as expectations for global demand look weak.
The announcement sent prices for Brent crude, the global oil benchmark, up 1% to trade at $76 a barrel at 6.03 a.m. ET. WTI, the US benchmark, rose 1.1% to $71.
Saudi Arabia first announced its cut after a meeting in June between members of the Organization of the Petroleum Exporting Countries (OPEC), Russia and other smaller producers, an alliance known as OPEC+.
“This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” the Saudi Press Agency quoted an official source in the Ministry of Energy as saying Monday.
At the June meeting, Riyadh also said it would extend a production cut of 500,000 barrels per day — first announced in April — to the end of next year.
Other OPEC+ members have pledged to slash output over that time amid a disappointing outlook for global demand, and as a strong post-pandemic rebound in the Chinese economy looks increasingly unlikely.
Chinese factory survey data, released Monday, showed only modest growth in activity in the world’s second largest economy last month, with some firms cutting staff as sales came in weaker-than-expected.
“Optimism around the 12-month outlook for production waned to an eight-month low in June, as some firms expressed concerns over relatively sluggish market conditions,” analysts at S&P Global wrote in Monday’s report.
— This is a developing story and will be updated.
