LONDON: Oil prices surged posting biggest daily rise in nearly year, after surprise announcement by OPEC+ to cut more production jolted markets. Brent crude was trading at $ 84.22 barrel, up $ 4.33 or 5.4 percent, after touching highest in month at $ 86.44 earlier in session.

US West Texas Intermediate crude was at $ 79.84 a barrel, up $ 4.17 or 5.5 percent, after earlier hitting highest level since late January. Organisation of Petroleum Exporting Countries and their allies including Russia shook markets by announcing further production cuts of about 1.16 million barrels per day (bpd) on Sunday. Group, known as OPEC+, had been expected to maintain its earlier decision to cut output by 2 million bpd until December at its monthly meeting on Monday. Pledges bring total volume of cuts by OPEC+ to 3.66 million bpd according to Reuters calculations, equal to 3.7 percent of global demand.

As result, Goldman Sachs lowered its end-2023 production forecast for OPEC+ by 1.1 million bpd and raised its Brent price forecasts to $ 95 and $ 100 a barrel for 2023 and 2024, respectively, it said in note.

Brent fell last month towards $ 70 barrel, lowest in 15 months, on concerns that global banking crisis and rising interest rates would hit demand despite lower OPEC oil output in March due to halt in some of Iraq’s exports.

Published in The Daily National Courier, April, 04 2023

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