Saudi Arabia and other gulf states announce 1 million barrels per day in oil output cuts

<p>This is a bolt of lightning out of the blue for the oil bulls. </p><p>Saudi Arabia announced a voluntary 500k bpd oil production curb through year end and that was followed by several other gulf states joining in:</p><ul><li>Iraq to cut by 211k bpd</li><li>Kuwait to cut by 128K bpd</li><li>Oman to cut by 40k bpd</li><li>UAE to cut by 144k bpd</li></ul><p>Add it all up and that's 1,023,000 barrels per day, or about 1% of global oil output.</p><p>That's a massive swing in a physical market that already looked like it would tighten substantially into the summer. The move shows the vulnerability of the US after unloading about 1 million barrels per day for six months last year (and into this year).</p><p>What's especially notable is that this announcement goes through year end. It's also a slap in the face to reports that the UAE was thinking of ditching OPEC as their participation is particularly notable.</p><p>Tomorrow is OPEC's JMMC meeting and we might see talk from them that the oil market is oversupplied and that action was needed. In any case, this is puts a bow on this month's oil bottom and I'd be surprised if we don't see $80 WTI on Monday.</p> This article was written by Adam Button at www.forexlive.com.

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