Market to rise moderately after Saudi Arabia decision

Oil prices rose today, June 6, after the world's leading exporter Saudi Arabia pledged to cut production by an additional 1 million barrels per day from July 2023.

Gasoline prices today, June 6: Up after Saudi Arabia's decision. (Source: Getty Images)

World oil prices rose in the session on June 5 after the world's leading exporter Saudi Arabia pledged to cut production by an additional 1 million barrels per day from July 2023 to deal with "headwinds" causing the market to decline.

Brent crude futures rose 58 cents to $76.71 a barrel at the close of trading, after hitting a session high of $78.73 earlier. U.S. West Texas Intermediate (WTI) crude also rose 41 cents to $72.15 a barrel after hitting an intraday high of $75.06 a barrel.

Saudi Arabia's energy ministry said the country's output will fall from around 10 million barrels per day in May to 9 million barrels per day in July.

This is the largest voluntary cut in many years and is part of a broader agreement between the Organization of the Petroleum Exporting Countries (OPEC) and major non-OPEC producers (OPEC+). The goal of the plan is to limit supply in 2024 to push up prices.

The possibility of higher oil prices has increased sharply following the new OPEC+ agreement, said Fatih Birol, head of the International Energy Agency (IEA).

OPEC+ produces about 40% of the world's crude oil and has cut its output target by a total of 3.66 million barrels per day, accounting for 3.6% of global demand.

The OPEC+ production deal has pushed oil prices up moderately, according to analysts at Goldman Sachs. They said Brent crude for December delivery could rise by $1 to $6 a barrel depending on how long Saudi Arabia maintains production at 9 million barrels a day.

The immediate market impact of this Saudi cut could be lower, as drawing oil from storage takes time and the market may have already placed some probability on this cut, Goldman Sachs analysts added.

Domestic retail prices of gasoline on June 6 are as follows:

E5 RON 92 gasoline is not more than 20,878 VND/liter. RON 95 gasoline is not more than 22,015 VND/liter. Diesel oil not more than 17,943 VND/liter. Kerosene not more than 17,771 VND/liter. Fuel oil not exceeding 14,883 VND/kg.

E5 RON 92 gasoline is not more than 20,878 VND/liter.

RON 95 gasoline is not more than 22,015 VND/liter.

Diesel oil not more than 17,943 VND/liter.

Kerosene not more than 17,771 VND/liter.

Fuel oil not exceeding 14,883 VND/kg.

Source