OPEC+ extends output deal and Saudis cut by additional 1 million barrels per day

  • UKOil

OPEC+'s gathering in Vienna was a tough session where members, consisting of OPEC and allies led by Russia, reached a significant decision. They unanimously agreed to prolong the existing production cuts until the conclusion of 2024.

This move comes after their initial commitment last October to reduce output by 2 million barrels per day. Surprisingly, in April, certain OPEC+ members announced an additional reduction of 1.6 million barrels per day.

Moreover, Saudi Arabia has decided to further trim its oil production by an extra 1 million barrels per day in July, with the option of extending if necessary.

Last month, Saudi Energy Minister Abdulaziz bin Salman cautioned short sellers. He emphasised that they would be "ouching" as they did in early April when the unexpected production cuts led to a spike in crude prices.

Trade the News: View our Economic Calendar

The cuts have supported FXCM's UKOil CFD. Its daily candlesticks have moved into their bullish zone, between the upper blue and red bands. The RSI has punched above 50 (green square), denoting an underlying bullish momentum. The longer it can maintain this position, the greater the support for prices.

Oil is well off its 2022 highs amid worries of a global economic slowdown. The current cuts are likely to be short-term in nature, with the longer-term position dependent on macroeconomics and if the Saudi cut extends beyond July.

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.