Saudi Arabia will cut its oil production.


OPEC, Russia and other oil producers reached an agreement on Tuesday that includes a commitment by Saudi Arabia to reduce its oil production by one million barrels a day in February and March — a cut of more than 10 percent from its daily target in January — while Russia and Kazakhstan won relatively modest increases.

The overall effect will be a reduction in oil production, a move that pushed prices up to levels not seen since February.

Traders, who had worried that the group might agree to an increase, pushed prices up more than 4 percent for the day. Brent crude crossed over $53 a barrel, and West Texas Intermediate exceeded $50 a barrel.

Essentially, Saudi Arabia and Russia, the two major producers in the OPEC Plus group, appear to have agreed to disagree. Russian officials wanted an increase in production, arguing that a cut by OPEC and its allies would risk losing market share to shale oil producers in the United States. The Saudis urged caution, with the pandemic still far from under control.



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