Oil prices increase as Saudi Aramco stops plans to raise output capacity
Date
1/31/2024 6:56:20 AM
(MENAFN) In the latest trading session, oil prices experienced an upward surge, propelled by the noteworthy decision of Saudi Aramco to abandon its pursuit of elevating the maximum sustainable production capacity to 13 million barrels per day. The Saudi Arabian Oil Company, Aramco, communicated this development through an official statement published on the Saudi market website. The Ministry of energy in the Kingdom directed Aramco to concentrate on maintaining the maximum sustainable production capacity at the existing level of 12 million barrels per day, thereby discontinuing the initial plan to further raise it to 13 million barrels per day.
This strategic shift marks a significant departure from the March 2020 directive, wherein the President of Saudi Aramco had announced the ministry's directive to increase the maximum sustainable production level to 13 million barrels per day. At that time, the company had actively embarked on implementing this directive to its full potential.
Following the recent announcement, the market responded with an immediate impact on oil prices. Brent crude, a key benchmark, witnessed a rise of approximately 0.30 percent, reaching USD82.56 per barrel. Simultaneously, Texas crude also saw a positive uptick, increasing by about 0.43 percent and reaching USD77.11 per barrel.
Beyond Aramco's decision, geopolitical tensions in the Middle East further contributed to the buoyancy in oil prices. Reports indicated a 0.3 percent increase in Brent crude futures, reaching USD82.65 per barrel, while US West Texas Intermediate crude experienced a 0.4 percent rise, reaching USD77.09 per barrel. The confluence of these factors underscores the intricate dynamics that influence global oil markets and the sensitivity of prices to strategic decisions made by major oil-producing entities.
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