Oil prices boosted by Saudi Arabia pledge to deepen output cut

May 12, 2020, 12.32 PM | Source: Reuters
Oil prices boosted by Saudi Arabia pledge to deepen output cut


OIL PRICE - SINGAPORE. Oil futures rose on Tuesday, boosted by an unexpected commitment from Saudi Arabia to deepen production cuts in June in a bid to help drain the glut in the global market that has built up as the coronavirus pandemic crushed fuel demand.

Tuesday (12/5), 12.00 WIB, Brent crude futures advanced 0.5%, or 15 cents, to US$ 29.78, after hitting an intraday high of $30.11 a barrel.

U.S. West Texas Intermediate (WTI) crude futures were up 1%, or 26 cents, at U$$ 24.40 after touching an intraday high of US$ 24.77.

Read Also: China's Wuhan reports first coronavirus cluster since lifting lockdown

Saudi Arabia said overnight it would cut production by a further 1 million barrels per day (bpd) in June, slashing its total production to 7.5 million bpd, down nearly 40% from April.

"This reduction in production provided excellent optics encouraging other OPEC+ members to comply and even offer additional voluntary cuts, which should quicken the global oil markets' rebalancing act," Stephen Innes, chief global market strategist at AxiCorp, said in a note. 
OPEC+ is a group comprised of members of the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia.

The United Arab Emirates and Kuwait committed to cut production by another 180,000 bpd in total.

Kazakhstan has also ordered producers in large and mid-sized oil fields including Tengiz and Kashagan to cut oil output by around 22% in the May to June period.

Editor: Anna Suci Perwitasari

Latest News