Oil prices jumped by more than 5% after Saudi Arabia announced an additional voluntary production cut, and Brent crude reached $ 53.71, achieving a gain of 5.13%.
WTI also rose 5.29%, to breach the $ 50 level.
The Saudi Energy Minister, Prince Abdulaziz bin Salman, described the voluntary reduction in oil production as a gesture of goodwill from Saudi Crown Prince Mohammed bin Salman to support oil markets.
Saudi Arabia announced an additional voluntary reduction in oil production by one million barrels per day in February and March, in addition to its share of the OPEC + group cuts.
The group countries agreed to increase oil production by 75,000 barrels per day in February, and the same in March, thus reducing production cuts by this amount.
The OPEC + group decided that it will hold the next meeting of the Joint Ministerial Monitoring Committee of the oil production agreement on February 3, and the group’s next expanded meeting on March 4, 2021.
OPEC + has asked non-compliant countries to submit compensation plans by January 15th.
Russia and Kazakhstan
The OPEC + agreement will allow Russia to increase its production by 65 thousand barrels per day, and for Kazakhstan by 10 thousand barrels per day in February and the same in March.
The group, made up of thirteen OPEC members led by Saudi Arabia and their 10 allies led by Russia, sought to reach a compromise between those who prefer to keep the current cuts to production levels due to the market uncertainty caused by the Covid-19 pandemic, and those who prefer to produce an additional 500,000 barrels. Daily in the market.
The group accelerated the pace of its monthly meetings due to price fluctuations in light of the health crisis and the damage it was inflicting on the global economy.
Demand tumbled
The demand for crude oil collapsed due to the national shutdowns associated with the pandemic in 2020, and oil-producing countries are trying to adjust their production in order to support black gold prices.
The last round of meetings, between November 30 and December 3, “paved the way for a gradual return of two million barrels per day to the market over the next few months, with the participating countries ready to adjust these levels according to market conditions and their development,” according to what OPEC Secretary-General said. Mohamed Barkindo Sunday.
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