OPEC, Saudi Arabia and other countries in the Persian Gulf region announced a reduction in daily production of one million barrels of oil.
Saudi Arabia announced that it will voluntarily limit its oil production by 500,000 barrels per day by the end of the year.
That’s a huge swing in a physical market that previously looked like it would slow down significantly over the summer. The move underscores the vulnerability of the United States after dumping about 1 million barrels per day for six months last year (and this year).
It is noteworthy that this announcement continues until the end of the year. It also slaps down reports that the UAE is considering leaving OPEC, as their contribution is particularly significant.