On the back of Saudi Arabia’s announcement that it will unilaterally enact an oil production cut, the price of the commodity jumped sharply on Tuesday. At one point, futures for the U.S. benchmark West Texas Intermediate (WTI) crude price topped $50 per barrel, a level not seen since February 2020, before settling down to $49.93. Brent Crude, meanwhile, ended the day at $53.60.
Saudi Arabia’s surprising move is part of an agreement reached by OPEC and other major oil producing nations. The Middle Eastern country will cut off 1 million barrels per day from its production target of roughly 9.1 million. At the same time, Russia and Kazakhstan will enact modest increases, with the former bumping up its output by 65,000 barrels per day in both February and March, and the latter increasing its own by around 10,000.