Oil prices increased Monday on the news that Saudi Arabia and Russia would each impose additional supply cuts for the month of August, amounting to roughly 1.5% of global supply and threatening to push up gas prices for drivers across the United States through the second half of the year.
Saudi Arabia said it would maintain its supply cut of 1 million barrels per day through August and warned it could extend the cuts further if weaker than anticipated global demand persists. The extended cuts put the kingdom's daily production down to just 9 million barrels per day, its lowest point in several years.Meanwhile, Russian Deputy Prime Minister Alexander Novak also announced Monday his country would also slash its oil supply in August by 500,000 barrels per day.
The announcements from the world’s two largest oil producers immediately caused prices to climb, with futures for international benchmark Brent crude rising as high as $76.60 per barrel on Monday afternoon — up 1.6% from the previous day of trading. "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 Saudi state-run news SPA quoted a Ministry of Energy official as saying early Monday.
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