Saudi Arabia agreed to take one for the team this weekend and volunteered to cut another 1 million barrels per day off its crude oil production to keep the market in check-and to punish short sellers. But Saudi Arabia's Energy Minister has had it up to here with other OPEC members failing to meet their production quotas month after month, according to Bloomberg.
Saudi Arabia's Energy Minister also spoke out against Russia's lack of transparency when it comes to crude oil production.
Saudi Arabia's extra 1 million bpd "lollipop" cut is only good for one month, and it could just as easily undo its voluntary cuts as of August should other OPEC members fail to bring their production in line with their quotas. This is the equivalent to Dad telling the kids he's going to turn the car around if they continue to misbehave.
Saudi Arabia was not referring to the UAE, of course. The UAE was given the go-ahead to increase production by 200,000 bpd, while some of the African members were asked to give up some of their unused quotas.
On Sunday, the OPEC+ producers decided to keep the current cuts until the end of 2024, while OPEC's top producer and the world's largest crude oil exporter, Saudi Arabia, said it would voluntarily reduce its production by 1 million barrels per day in July, to around 9 million barrels per day.
Crude oil prices are trading up 1.55% on the day, with WTI trading at $72.85 at 10:14 a.m. ET, although prices saw a temporary spike on Sunday, with WTI nearing $74.
Some analysts have forecast that Brent prices-now above $77 per barrel-could reach $100 per barrel by the end of the year.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More