WTI recovers above $26 as Saudi Arabia announces additional output reduction

• WTI erases daily losses after Saudi Arabia's announcement on oil production.
• Kingdom introduces additional output curbs on top of agreed OPEC+ cuts.

Crude oil prices gained traction in the last hour after Saudi Arabia's energy ministry announced that they have directed Aramco to lower its oil production by an additional one million barrels per day in June.

WTI pulls away from daily lows

The barrel of West Texas Intermediate (WTI), which tested the $25 handle earlier in the day, spiked to $26.70 with the initial reaction but struggled to preserve its momentum. As of writing, WTI was down 0.5% on a daily basis near $26.

"Saudi Arabia's oil production for June, after both its targeted and voluntary cuts, will be 7.492 million barrels per day," a spokesperson for the energy ministry clarified. Moreover, the spokesperson said that they are hoping that this decision will encourage other OPEC+ producers to curd their output as well.

Last week, heightened hopes of the global energy demand recovering on easing lockdown restrictions provided a boost to crude oil prices. Additionally, a lower-than-expected build in crude oil inventories in the US, as well as a record low number of active oil gas rigs in the US at 374, helped WTI push higher.