Saudi Arabia will extend its voluntary oil production cut of 1 million barrels per day into September, the state-owned Saudi Press Agency (SPA) said on Thursday. This is the third month in a row that the kingdom has implemented the cut.
The SPA said that the cut will reduce Saudi Arabia's production to approximately 9 million barrels per day in September. The cut can be extended or deepened, the SPA said.
The decision to extend the cut comes as global oil prices have been under pressure in recent months. The price of Brent crude oil, the international benchmark, is currently trading around $105 per barrel.
The cut is likely to support oil prices in the short term. However, it could also lead to higher gasoline prices for consumers in the United States and other countries.
Background
Saudi Arabia is the world's largest oil exporter. The kingdom's decision to cut production is a significant move that could have a ripple effect on global oil markets.
The cut is part of Saudi Arabia's efforts to support oil prices. The kingdom has been under pressure from the United States and other countries to increase production in order to lower prices. However, Saudi Arabia has resisted these calls, arguing that it needs to protect its market share.
Impact
The extension of the oil production cut is likely to support oil prices in the short term. However, it could also lead to higher gasoline prices for consumers in the United States and other countries.
The cut could also have a negative impact on the global economy. Higher oil prices could lead to slower economic growth and higher inflation.
Conclusion
Saudi Arabia's decision to extend the oil production cut is a significant move that could have a ripple effect on global oil markets and the global economy. The cut is likely to support oil prices in the short term, but it could also lead to higher gasoline prices and slower economic growth.
This is the best summary I could come up with:
The national average for U.S. gas prices stood at about $3.82 a gallon on Tuesday — about 30 cents higher than a month ago, according to motor club AAA.
While today’s prices at the pump remain far lower than they were last year, when energy costs soared worldwide in the months following Russia’s invasion of Ukraine, experts say such a jump is unusual.
This year’s record-breaking summer heat has also had an impact, driving up demand for air conditioning and forcing refineries to operate at reduced capacity.
The kingdom announced the extension in a statement on the state-run Saudi Press Agency, quoting an anonymous official in the Energy Ministry.
“This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” the official said.
A series of production cuts over the past year has failed to substantially boost prices amid weakened demand from China and tighter monetary policy aimed at combatting inflation.
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