OIL prices advanced yesterday after key producer Saudi Arabia slashed output by a million barrels in a bid to prop up prices, while Wall Street stocks retreated from multi-month peaks.

After an initial surge on the Saudi announcement, crude prices moderated somewhat as the day progressed.

The 23-nation Opec+ alliance, which includes Russia, had agreed Sunday to continue current output cuts until the end of next year.

But influential player Saudi Arabia also announced its own new cutback taking July production to nine million barrels per day, in a move that initially gave crude a jolt.

“The Saudis are basically giving up market share here and that strategy won’t work over the long-term,” said Oanda’s Edward Moya.

“The risk of more cuts seems unlikely given the market reaction,” Moya said. “Oil might remain stuck in a trading range until we see evidence that China’s recovery is improving.”

Sentiment remained largely buoyant after the United States clinched a breakthrough deal late last week to suspend its debt limit temporarily and avert a disastrous default.

Asian equities mostly rose, with Tokyo piling on more than 2% to hit a three-decade peak, but European stock markets fell.

Back in New York, major indices pulled back from last week’s peaks.

Analysts cited profit taking as a factor in the market after last week’s debt ceiling agreement sparked a rally.

Stocks on Friday were also supported by solid US labor data.

But a key economic indicator released yesterday – a survey reflecting services industry activity in May – showed the slowest growth since December.

The broad-based S&P 500 lost 0.2%.

“The major indices ultimately settled near their worst levels of the day,” said Briefing.com. “Still, there wasn’t any concerted selling interest and index losses were relatively modest.”

Among individual companies, Apple shed 0.8% after unveiling its first-ever virtual reality headset. The headset will focus on gaming, streaming video and conferencing, as well as health and fitness. 

The release puts Apple on a collision course with Facebook owner Meta, which had taken a head start on doubling down on virtual worlds, referred to as the metaverse.

Key figures around 2030 GMT

Brent North Sea crude: UP 0.8% at US$76.71 per barrel

West Texas Intermediate: UP 0.6% at US$72.15 per barrel

New York - Dow: DOWN 0.6 at 33,562.86 (close)

New York - S&P 500: DOWN 0.2% at 4,273.79 (close)

New York - Nasdaq: DOWN 0.1% at 13,229.43 (close)

London - FTSE 100: DOWN 0.1% at 7,599.99 (close)

Frankfurt - DAX: DOWN 0.5% at 15,963.89 (close) – AFP, June 6, 2023.