Oil prices have rallied after Saudi Arabia said it would cut production by an extra one million barrels a day in July in an attempt to prop up the crude market.
The Arab state will lower its output to its lowest level in several years as Saudi Energy Minister Prince Abdulaziz bin Salman said he “will do whatever is necessary to bring stability to this market”.
It follows a tense meeting of the Opec+ cartel of oil-producing nations over the weekend, where the 23-member group decided it would not deepen its recent cuts to output.
Vivek Dhar, director of mining and energy commodities research at Commonwealth Bank of Australia, called Saudi Arabia’s decision a “voluntary cut” that was “notable more for downside protection” .
Oil in New York tumbled 11pc last month amid concerns over the outlook for demand, especially in China.
Today, international benchmark Brent crude has already climbed as much as 1.5pc to more than $77 a barrel, while US-produced West Texas Intermediate has risen as much as 1.6pc toward $73.
Saudi Arabia has sacrificed further market share to stabilise the market.
While others in the group pledged to maintain their existing cuts until the end of 2024, Russia made no commitment to curb output further and the United Arab Emirates secured a higher production quota for next year.
Read the latest updates below.
07:43 AM
Prince Harry to take on Mirror over hacking claims
The Duke of Sussex is due to appear at the High Court today as his case against the publisher of the Daily Mirror over alleged unlawful information gathering begins.
Prince Harry is suing Mirror Group Newspapers (MGN) for damages, claiming journalists at its titles – which also include the Sunday Mirror and Sunday People – were linked to methods including phone hacking, so-called “blagging” or gaining information by deception and use of private investigators for unlawful activities.
His claim is being heard alongside three other “representative” claims during a trial which began last month and is due to last six to seven weeks.
Prince Harry alleges about 140 articles published between 1996 and 2010 contained information gathered using unlawful methods, and 33 of these have been selected to be considered at the trial.
MGN is contesting the claims and has either denied or not admitted each of them. The publisher also argues some of the claimants have brought their legal action too late.
The Duke is due to arrive at the court in London today and is due to enter the witness box on Tuesday, when he will face cross-examination from MGN’s lawyers.
07:30 AM
Diageo boss’ retirement brought forward after ‘significant setback’ in surgery
The world’s largest spirits maker has brought forward the appointment of its new chief executive after its boss suffered complications in surgery on a stomach ulcer.
Sir Ivan Menezes, who has led Johnnie Walker maker Diageo since 2013, had announced he would retire this summer, with Debra Crew due to take over as chief executive on July 1.
However Diageo announced today that Sir Ivan, who was knighted in the King’s first New Year’s Honours list, has “suffered a significant setback due to complications, which followed emergency surgery on the ulcer”.
As a result Ms Crew has been appointed interim chief executive with immediate effect, ahead of her formal ratification to the role in July.
The company said:
Our thoughts are with our much-loved colleague, Ivan, and his family.
Out of respect for Ivan and his family’s privacy, we will not be commenting further at this time.
07:13 AM
Saudi cuts come after warning to ‘watch out’
Saudi Arabia’s production cut in July could be extended, but the Saudis will keep the market “in suspense” about whether this will happen, Energy Minister Prince Abdulaziz bin Salman said.
The minister has repeatedly sought to hurt bearish oil speculators, warning them to “watch out” in the build-up to Sunday’s meeting.
Vandana Hari, founder of Vanda Insights, told Bloomberg TV: “Saudi Arabia would ideally want prices to be above $80 a barrel, and it is now trading around $77 a barrel.”
She added that if the health of the global economy falters, the short sellers “will be back in no time”.
07:07 AM
Good morning
Oil prices have advanced after Saudi Arabia said it would cut production by a million barrels a day from July, sacrificing market share in an attempt to prop up the crude market.
Brent crude, the international benchmark, has already climbed as much as 1.5pc to more than $77 a barrel, while US-produced West Texas Intermediate has risen as much as 1.6pc toward $73.
5 things to start your day
1) Saudi Arabia slashes oil production and threatens to do ‘whatever is necessary’ to boost prices | The move is likely to inflame tensions with US President Joe Biden and risks reigniting inflation in Britain and Europe
2) Tim Cook seeks Apple’s next iPhone moment with bet on VR | Monday’s launch is anticipated to be the most pivotal of Cook’s leadership
3) Record demand for 35-year mortgages as first-time buyers face soaring rates | More Britons sign up to loans that will stretch into their seventies
4) Siemens and Microsoft launch last-ditch bid to save CBI as support drains away | Businesses lead show of support for embattled group ahead of crunch vote on its future
5) Aldi has lightbulb moment in efforts to keep down prices | German supermarket has resorted to dimming stores as it grapples with inflation
What happened overnight
Asian stocks followed Wall Street higher on Monday after strong US hiring data coupled with scant wage gains suggested a possible recession might be further away, but also that inflationary pressures are weakening.
The Nikkei 225 in Tokyo advanced 1.9pc to 32,124.17 and the Shanghai Composite Index added less than 0.1pc to 3,232.80. The Hang Seng in Hong Kong gained 0.7pc to 19.078.22.
The Kospi in Seoul was 0.6pc higher at 2,616.25 and the S&P ASX 200 in Sydney jumped 1.2pc to 7,232.10.
Singapore and Jakarta gained. Markets in New Zealand and Thailand were closed for holidays.
Wall Street’s benchmark S&P 500 index leaped 1.5pc on Friday, putting it on the verge of entering what traders call a “bull market” after rising nearly 20pc in seven months.
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Source: https://finance.yahoo.com/news/oil-prices-rise-opec-cuts-060741492.html