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Oil prices up 5% ahead of OPEC+ production cut

April 4, 2023 at 12:10 pm

An OPEC sign [Stefan Wermuth/Bloomberg via Getty Images]

Oil prices soared yesterday by about five per cent after Saudi Arabia and other OPEC+ members announced a sudden voluntary cut in crude production.

US crude futures rose 4.85 per cent to $79.34 a barrel, while Brent crude futures rose 5.02 per cent to $83.90 a barrel, according to Bloomberg data.

Saudi Arabia led a coordinated reduction in daily production in a number of major oil countries, despite pressure from the United States to increase production.

Saudi Arabia, the United Arab Emirates, Kuwait, the Sultanate of Oman and Algeria announced that they would reduce their daily production by a total of more than one million barrels per day as of May until the end of the year, in the largest production cut since the decision of the OPEC+ producers in October 2022 to reduce production by two million barrels per day. Following the announcement, the OPEC members said it was “a precautionary measure aimed at supporting the stability of the oil market.”

READ: OPEC+ members to reduce oil production from May