Saudi Arabia said Thursday it will extend its unilateral production cut of 1 million barrels of oil a day through the end of September in its effort to boost flagging energy prices, a move that could push U.S. gas prices higher.
The Saudi reduction, which began in July, comes as the other OPEC+ producers have agreed to extend earlier production cuts through next year.
The national average for U.S. gas prices stood at about $3.82 a gallon on Tuesday — about 30 cents higher than a month ago, according to motor club AAA. While today’s prices at the pump remain far lower than they were last year, when energy costs soared worldwide in the months following Russia’s invasion of Ukraine, experts say such a jump is unusual.
The kingdom announced the extension in a statement on the state-run Saudi Press Agency, quoting an anonymous official in the Energy Ministry. The official added that the cut “can be extended or deepened” if the need arises.
Mortgage rates tick higher
The average long-term U.S. mortgage rate rose again this week, bad news for Americans seeking to upgrade or buy their first home.
The average rate on the 30-year home mortgage rate ticked up to 6.90% this week from 6.81% a week ago. A year ago, the benchmark home loan rate stood at 4.99%, mortgage buyer Freddie Mac reported Thursday.
The average rate on 15-year fixed-rate mortgages, popular with those refinancing their homes, climbed to 6.25% from 6.11% last week. A year ago, it was 4.26%.
High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already overpriced for many Americans.
High inflation has driven the Federal Reserve to raise its benchmark interest rate 11 times since March 2022. Its fed funds rate has hit the highest level in 22 years.
Source: bostonherald.com