OPEC+ cuts oil production, leading to a surge in prices

3 Apr 2023 , 08:37 AM

Monday morning Asian trading saw an almost 6% increase in oil prices after major producers, led by Saudi Arabia, unexpectedly curtailed their output by more than one million barrels per day.

Brent increased 5.67% to $84.42, while the West Texas Intermediate price increased 5.74% to $80.01 per barrel.

The OPEC+ cartel cut its daily output by two million barrels in October, and the Saudi Arabian, Iraqi, UAE, Kuwait, Algeria, and Oman decision will be in effect from the beginning of next month until the end of the year.

Despite US efforts to raise output, the fall came when Russia decided to continue a cut of 500,000 barrels per day.

The announcement will fuel further inflationary concerns and increase pressure on central banks to raise interest rates even higher.

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