Oil prices rise 5% after announcement of production cut

oil prices rose sharply on Monday after several key market players, such as Saudi Arabia, Iraq and Russia, announced a cut in their production as a “precautionary measureafter the recent drop in prices.

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the barrel of Brent of the North Sea rose 5.31%, to 84.13 dollars and the US benchmark, the WTI, it rose 5.38% to $79.74.

So far this Monday, April 3, both indices have recorded increases of close to 8%.

The production cut announced on Sunday by Iraq, Algeria, Saudi Arabia, the United Arab Emirates, Oman, Kazakhstan and Kuwait It will come into force in May and will remain until the end of the year.

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Altogether, it involves a drop in pumping of one million barrels per day.

For its part, Russia announced on Sunday that it is extending the cut in its crude production by 500,000 barrels per day until the end of the year.

The announcements came ahead of a videoconference meeting of a ministerial panel of the Organization of Petroleum Exporting Countries and their allied countries (Opec+), a cartel led by Saudi Arabia and Russia.

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Refinery.

AFP

Instead, USA advocates increasing production in the face of increased demand at a time when China reactivated its economy after lifting restrictions due to the pandemic.

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This announcement revives fears about persistent inflation and adds more pressure on central banks to continue raising interest rates.

AFP