“The likelihood of Saudi Arabia coping with this on its own on a sustained basis is quite low,” said Citi, which expects Brent crude to remain range-bound, averaging $81 a barrel this year.
Crude prices were lower, with Brent trading around 76.36 dollars per barrel and an intraday drop of 0.46%, while the West Texas Intermediate (WTI) traded at a price of 71.81 dollars per barrel and down 0.46%, as concerns about global growth slowed the rally after the Saudi announcement.
“For the million barrel cut to be neutral from Saudi Arabia’s point of view, you need crude oil to go up $10,” said Ole Hansen of Saxo Bank.
For now, the main driver of the oil price remains concerns about global growth and demand, not only in China, but also in the United States and other key consumers, Hansen added.