Proactive Investors - The oil price jumped after Saudi Arabia extended its 1-million-barrels-per-day voluntary oil production cut until the end of the year, according to the state-owned Saudi Press Agency.
Riyadh first applied the 1 million-barrels-per-day reduction in July and has since extended it on a monthly basis.
The cut adds to 1.66 million barrels per day of other voluntary crude output declines that some members of the Organization of the Petroleum Exporting Countries have put in place until the end of 2024.
Brent crude is trading 1.3% higher at $90.11/barrel while West Texas Intermediate is 1.6% to the good at $87.23.
BP PLC (LSE:LON:BP) and Shell PLC (LON:SHEL) have climbed on the back of the news, up 1.9% and 1.6% respectively.
Neil Wilson at Markets.com said he thinks "it shows the Saudis’ commitment to maintaining balance in the oil market – they are fairly comfortable with these voluntary production cuts for the time being and want the market to know it."
"This could see some more oil shorts who have been holding out finally throw in the towel with the breakout from the bottom formation now looking even healthier," he suggested.