Oil prices rose 2 percent in Tuesday’s trade as markets assessed the impact of August output cuts by Saudi Arabia and Russia.

Saudi Arabia said on Monday it would extend a voluntary production cut of one million barrels a day until August, while Russia offered to cut production and export levels by 500,000 barrels a day and Algeria by 20,000.

Thomas Varga, an analyst at BVM, said that if these cuts are fully implemented, the production cut level will be 5.36 million barrels per day compared to August 2022, and may be higher due to the inability of many countries in the OPEC + alliance. To meet their full production quota.

Total production cuts are currently equivalent to five million barrels per day, or five percent of total global oil production.

Price movement

Brent crude was up $1.49 at $76.14 a barrel at 1520 GMT. U.S. West Texas Intermediate crude was up $1.41 at $71.20.

“It is clear that the Saudis are taking precautionary and precautionary measures to stabilize the price of crude oil, while also raising prices to $80 a barrel to support their domestic budgets,” said Andrew Libo, president of Libo Oil Associates.

Both benchmarks were down about 1 percent in the last session as a bleak economic outlook led oil to give up early gains.