The price of crude oil is up 2% on news that leading producer Saudi Arabia plans to cut its production level by one million barrels a day going forward.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) made no changes to planned oil production for the remainder of 2023 during a meeting held on June 4.
However, Saudi Arabia, which is the world’s top oil exporter, announced a voluntary output cut of one million barrels per day beginning in July of this year.
Saudi officials said that their daily oil output will decline to nine million barrels per day from 10 million barrels currently.
News of the production cut drove up the price of Brent crude oil, the international standard, to $77.46 U.S. per barrel. West Texas Intermediate (WTI) crude oil, the U.S. benchmark, saw its price increase to $73.05 U.S.
OPEC+ produces approximately 40% of the world’s crude oil and its policy decisions can have a big impact on prices around the world.
In April of this year, the oil cartel announced a combined 1.66 million barrels per day of production cuts through the end of the year.
Many oil analysts had expected the alliance to keep its output unchanged at its latest meeting. However, most oil analysts did not expect further production cuts from Saudi Arabia.
