Saudi Arabia on Tuesday announced it would cut oil production by a stunning 1 million b/d in February and March, sending crude prices to a 10-month high.

Oil Prices

The news came at the conclusion of the latest monthly meeting of the Organization of the Petroleum Exporting Countries and its allies, aka OPEC-plus. Saudi Arabia leads the cartel.

According to the accord, Saudi Arabia volunteered to cut production by 400,000 b/d in February and in March. The OPEC-plus cut overall would total 7.125 million b/d in February and decline to 7.05 million in March.

“Saudi Arabia put the cherry on the cake,” said Rystad Energy analyst Bjornar Tonhaugen. “If there is one way to describe what its voluntary cut means for the market, ‘happy hour’ is a pretty fitting term. They say there is no...