Oil Falls as Optimism Over Saudi-Led Production Cut Fades Fast
(Bloomberg) -- Oil edged lower as traders weighed the outlook for supply and demand after Saudi Arabia’s surprise pledge for extra supply cuts.
West Texas Intermediate dipped below $72 a barrel on Tuesday as a cautious tone spread across markets. Futures surged early Monday following the Saudi announcement after a tense OPEC+ meeting, before giving up most of the gains during the session. The kingdom also raised its crude prices to Asia for July.
![](https://assets.bwbx.io/images/users/iqjWHBFdfxIU/i9vCjZHgLkfs/v2/-1x-1.png)
Saudi Arabia pledged to do “whatever is necessary” to stabilize the market as concerns over the demand outlook, especially from China, weighed on prices. Oil tumbled 11% last month, in part due to resilient Russian output, despite the OPEC+ producer saying earlier this year it would reduce supply.
The kingdom followed its move to cut output by 1 million barrels a day in July with an increase to its crude prices for the same month. It was expected to trim the cost of its oil, according to a survey of buyers in Asia, which was carried out prior to the OPEC+ meeting.
The OPEC+ gathering reiterates a commitment to provide stability but the outcome of the meeting will have a minimal impact on the oil market, said Sean Lim, an analyst for RHB Investment Bank Bhd in Kuala Lumpur.
©2023 Bloomberg L.P.
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