Oil prices soar 6% as major producers cut output by 1mn barrels

April 03, 2023 (MLN): Oil prices surged on Monday morning in Asian trade after a surprise announcement from major oil producers led by Saudi Arabia.

The group, which includes Iraq, the United Arab Emirates, Kuwait, Algeria, and Oman, has agreed to cut oil output by more than one million barrels per day from next month until the end of the year. This marks the biggest reduction in output since the OPEC+ cartel slashed two million barrels per day in October.

The move comes despite calls from the United States to increase production, and on top of a Russian decision to extend a cut of 500,000 barrels per day. 

The West Texas Intermediate contract jumped 5.74 percent to $80.01 a barrel, while Brent jumped 5.67% to $84.42 in response to the news.

Analysts warn that market sentiment is likely to take a hit, as higher levels of expected inflation assume higher interest rates for a longer period.

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