OPEC Cuts , Put Oil Prices , on Track to Make Big Gains.
CNBC reports that oil prices are set to see their biggest gain in almost a year since OPEC announced it would cut output by 1.6 million barrels per day.
Following the announcement, brent crude futures rose 6.15% to reach $84.80 a barrel.
Meanwhile, U.S. West Texas Intermediate crude futures jumped 6.25% to reach $80.40 per barrel.
CNBC reports that the OPEC cuts will begin in May and run until the end of 2023.
.
Saudi Arabia reportedly called the decision a "precautionary measure" aimed at stabilizing the volatile oil market.
The news comes after Russia announced that it would cut oil production by 500,000 barrels per day.
.
CNBC reports that other oil producers have also vowed to cut production, including the UAE, Kuwait, Oman and Iraq.
.
The selected involvement of the largest OPEC+ members suggest that adherence to production cuts may be stronger than has been the case in the past, Vivek Dhar, Commonwealth Bank of Australia, via CNBC.
CNBC reports that some experts have suggested that the latest cuts may have a more significant impact that similar cuts made in 2022.
Most of the cuts will be made by countries that are producing at or above quotas, which implies a higher share of the announced cuts will translate into real supply reductions than in October 2022, Amrita Sen, Energy Aspects’ founder, via CNBC
