03 April 2023

Surge in Oil Prices To Maintain Market Stability

“Officially, the cartel [Opec+ group of countries, which includes major producers Saudi Arabia, Iraq and Russia] wants price stability in oil markets,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank. “But in reality, they simply want higher prices.”

Oil price surges after surprise OPEC+ production cut

Move by world’s largest producers likely to unsettle western nations grappling with inflation

"The oil price surged to $86 a barrel after the world’s largest producers announced a surprise cut in production , a move that is likely to prompt fresh tensions with the US as western governments try to get a grip on inflation.

The Opec+ group of countries, which includes major producers Saudi Arabia, Iraq and Russia, said they would slash production by around 1m barrels a day, accounting for about 3.7% of global demand.

That is on top of existing plans to continue cutting 2m barrels a day – originally agreed in November – until the end of 2023.

The decision caused an immediate spike in Brent crude futures contracts for May, with the international benchmark for oil prices rising more than 7% to $86 a barrel on Monday morning. . ."

Oil Prices Jump, Signaling a 'Proactive, Pre-emptive' OPEC

The New York Times

https://www.nytimes.com › 2023/04/03 › business › oil-...

5 minutes ago — ... oil prices rose on Monday after Saudi Arabia and other major producers announced a surprise cut in crude production.

3 minute read April 3, 20234:40 AM PDTLast Updated 11 min ago

Oil Prices Jump, Signaling a ‘Proactive, Pre-emptive’ OPEC

Adding to global economic uncertainties, oil prices rose on Monday after Saudi Arabia and other major producers announced a surprise cut in crude production.

Crude oil prices

By Stanley Reed

April 3, 2023Updated 7:49 a.m. ET

Saudi Arabia said on Sunday that its 500,000 barrel-a-day cut in oil production was a “precautionary measure aimed at supporting the stability of the oil market.”

The immediate result so far has been a price surge. Oil prices soared in early trading on Monday with Brent crude, the international benchmark, rising as much as 8 percent before settling slightly to an increase of 6.5 percent, to about $85 a barrel. West Texas Intermediate crude, the U.S. standard, similarly spiked before easing to about $80.50 a barrel.

The surprise announcement signaled a potential new threat to global efforts to curb inflation and a challenge to the Biden administration, which has pushed for lower gasoline prices. European stock markets were mixed on Monday, while S&P 500 futures pointed toward a somewhat downbeat open.

The Saudi news, combined with cutbacks announced on Sunday by several other big OPEC producers, will bring a reduction of over one million barrels a day, or about 1 percent of global oil supplies, beginning next month.

Oil surges as OPEC+ surprise output target cuts shake markets

by 2 million barrels through the

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Oil prices soar after OPEC+ nations' surprise cut

Summary

OPEC+ cuts output by about 1.16 million bpd
Oil posts biggest daily rise in nearly a year
Producer group acted after oil hit $70 a barrel
Goldman Sachs raises Brent price forecast to $95 for 2023

LONDON, April 3 (Reuters) - Oil prices surged on Monday, posting their biggest daily rise in nearly a year, after a surprise announcement by OPEC+ to cut more production jolted markets.

Brent crude was trading at $84.53 a barrel as of 1115 GMT, up $4.64, or 5.8%, after touching the highest in a month at $86.44.

West Texas Intermediate crude U.S. was at $80.23 a barrel, up $4.56, or 6%, after hitting its highest level since late January..." READ MORE

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