OPEC+ announced a surprise 1.16 million barrels a day oil production cut over the weekend, which will take effect in May and run through the end of the year.
Saudi
Arabia led the reduction, committing to cut production by 500,000
barrels a day. Global oil prices jumped following news of the production
cut.
- International benchmark Brent
crude rose 6.15% to $84.80 a barrel, and U.S. West Texas Intermediate
crude jumped 6.25% to $80.40 a barrel.
- Russia, a member of
OPEC+, also announced on Sunday that it would cut its oil production by
500,000 barrels a day until the end of the year.
- Other
countries reducing oil output include Kuwait, Oman, Iraq, Algeria,
Kazakhstan, and the UAE, which plans to cut its production by 144,000
barrels a day.
- Analysts predict the production cuts could
reverse the recent decline in inflation, which would complicate interest
rate decisions of central banks.
- In March, oil prices dropped
to their lowest since December 2021, with Brent crude trading at around
$74.36 a barrel and West Texas Intermediate crude at around $67.61.
