(Bloomberg) — Oil declined as traders weighed the outlook for supply and demand after Saudi Arabia’s surprise pledge for extra supply cuts.
Most Read from Bloomberg
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.
Read More: How Midnight OPEC Dealmaking Won Gulf Unity at Africa’s Expense
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. That’s pushing some Asian refiners to consider buying more crude from other suppliers including Russia and West Africa, according to people familiar with the matter.
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.
To get Bloomberg’s Energy Daily newsletter direct into your inbox, click here.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P.