SULAIMANI (ESTA) — Oil prices rose on Thursday as Saudi Arabia unilaterally agreed to cut output over the next two months and as U.S. crude stockpiles fell.
Brent crude was up 40 cents at $54.70 a barrel by 0642 GMT, after gaining 1.3% overnight. U.S. West Texas Intermediate (WTI) gained 41 cents to $51.04 a barrel. It rose 1.4% on Wednesday.
Saudi Arabia, the world’s biggest exporter, said it would voluntarily cut 1 million barrels per day (bpd) of output in February and March, after OPEC+ met earlier this week.
“WTI crude seems poised to rise higher as the Biden administration will clamp down on U.S. crude production, the Saudis tentatively alleviated oversupply concerns with their 1-million bpd cut present, and as the dollar’s days seem numbered,” said Edward Moya, senior market analyst at OANDA, according to Reuters.
U.S. crude stocks also dropped and fuel inventories rose, the Energy Information Administration said on Wednesday. Crude inventories were down by 8 million barrels in the week to January 1 to 485.5 million barrels.
The drop in crude stocks is a typical year-end-occurrence as energy companies take oil out of storage to avoid tax bills.
