U.S. oil stocks rally as Saudi output cut pledge spurs rise in crude prices

June 5, 2023 9:23 AM EDT -- U.S. oil stocks rose in premarket trading on Monday as these companies were boosted by a jump in oil prices following an announcement from Saudi Arabia that it plans to cut production from next month.

Shares in oil majors ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX) both gained more than 1.3%, while oilfield services group Schlumberger (NYSE: SLB) increased by 1.67%.

Oil prices climbed sharply Monday, helping the European oil majors post strong gains, after Saudi Arabia, the world’s top exporter, pledged over the weekend additional production cuts from July, likely tightening the market further in the second half of the year.

The Saudis announced on Sunday that the country's output would drop to 9 million barrels per day in July, a cut of around 1 million barrels per day from its production levels in May.

This reduction, seeking to support slumping oil prices, came as the Organization of the Petroleum Exporting Countries and their allies, including Russia, a group known as OPEC+, agreed to extend production cuts into 2024.

By 09:06 ET (13:06 GMT), U.S. crude futures traded 2.54% higher at $73.56 a barrel, while the Brent contract climbed 2.31% to $77.89 per barrel.

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