A surprising move by OPEC+ which announced a cut in oil production starting from May of 2023 in full by 1 million barrels per day. This news comes a few minutes after cutting the largest cutoff between countries adhering to the expanded regulation of the major oil producers in the world, which is half a million barrels that Saudi Arabia will implement. In detail, then, the UAE will reduce its production by 144,000 barrels and Kuwait by 128,000 barrels. IraqAlone, it will contribute by cutting 211 thousand barrels per day, Kazakhstan 78 thousand barrels per day, Algeria 48 thousand barrels per day, and the Sultanate of Oman 40 thousand barrels. For its part, Russia will extend the production cut, still by 500,000 barrels per day, which it has already projected and communicated, from March to June, throughout 2023.
Thus, the price of oil rose on the morning of Monday, April 3. A barrel of West Texas crude oil for May delivery traded at $79.02, up 4.43%, while Brent crude for June delivery traded at $83.52 a barrel, up 4.54%.
The organization’s initiative comes unexpectedly after recent statements about the intention to keep production stable. The next official date for the cartel is set for June, but on the other hand, the group reserves the possibility of meeting at any time and making decisions and a meeting is expected tomorrow.
And the Saudi Energy Minister, when announcing the cut by half a million barrels, stressed that it was “a precautionary measure to maintain the stability of the oil market.” Crude oil prices fell sharply in March on fears of a banking crisis, with futures contracts in London, Bloomberg reports, hitting a 15-month low, near $70. The drop in prices led to the hypothesis of Saudi Arabia’s move, which seemed to be reversed later, thanks to the market rebound in the first days of April, which reached nearly $80 a barrel. But this was not true.
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