BUSINESS Oil prices climb after Saudi Arabia pledges further output cuts

BUSINESS

Oil prices climb after Saudi Arabia pledges further output cuts

Xinhua

07:29, May 13, 2020

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(Photo: Xinhua)

NEW YORK, May 12 (Xinhua) -- Oil prices gained on Tuesday after Saudi Arabia announced plans to further lower its production.

The West Texas Intermediate for June delivery rose 1.64 U.S. dollars to settle at 25.78 dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery was up 0.38 dollar to close at 29.98 dollars a barrel on the London ICE Futures Exchange.

"Prices have recently been boosted not only by hopes that demand will soon return, but also by massive voluntary and involuntary production cuts," Eugen Weinberg, energy analyst at Commerzbank Research, said in a note on Tuesday.

Saudi Arabia said on Monday that it plans to slash its oil production in June by an additional 1 million barrels per day, in addition to the reduction committed by the kingdom in the output-cut agreement reached by the OPEC+ last month.

The United Arab Emirates and Kuwait also intended to reduce output by more than required under the OPEC+ deal.

The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, agreed to cut output by 9.7 million barrels per day for May and June, aiming to tackle a global supply glut on the back of the COVID-19 crisis.


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