Saudi Arabia has extended its unilateral 1mn b/d voluntary crude production cut, first announced in July, for another month into September. The cut is part of Opec+ countries' precautionary efforts to support oil market stability and balance.
Front-month Ice Brent futures prices jumped by over $1/bl after the announcement, reaching $84.61/bl. This is the second monthly extension for the cut, which was first announced after the Opec+ group's most recent meeting in early June. Saudi Arabia said its cut could be extended or deepened if necessary.
The country had already pledged to cut 500,000 b/d from May levels as part of a coordinated 1.16mn b/d reduction announced by eight Opec+ members in April. The extension announcement comes just one day before a meeting of the Opec+ Joint Ministerial Monitoring Committee (JMMC), which meets bi-monthly to study market conditions and oversee country-level compliance to production cut pledges.
The JMMC can make recommendations to the full ministerial conference if it feels a change is necessary. Delegates see little need for any change at present, as oil prices have reached their highest for over three months.