Brent rises on Saudi production cut and OPEC+ output cut extension until 2024

The front-month ICE Brent contract has gained by $2.36/bbl on the day from Friday, to $77.87/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

Brent crude futures gained after Saudi Arabia announced an output reduction of 1 million b/d to 9 million b/d from July, at the OPEC+ meeting on Sunday.

The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, know as OPEC+, agreed to extend output cuts until the end of 2024. From 1 January 2024, OPEC+ will reduce its output target by another 1.4 million b/d, and has set a new target for the whole of 2024 to 40.46 million b/d.

Russia will extend its voluntary output cut of 500,000 b/d until December 2024, Russia's Deputy Prime Minister Alexander Novak said after the OPEC+ meeting.  

Oil markets have been monitoring the outcomes of this highly anticipated meeting as OPEC+ represents the leading group of producers of global crude oil. Its policies and regulations can have major impacts on prices.  

Downward pressure:

OPEC+ allowed the UAE to raise its output target by around 200,000 b/d to 3.22 million b/d.

On the other hand, commercial crude inventories in the US gained by 4.49 million bbls in the week to 26 May, according to official Energy Information Administration (EIA) figures released last week.

By Aparupa Mazumder 

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