Oil jumps over 6% after OPEC+ output cut

Oil tanks

Oil logged strong gains today, April 3, after the OPEC+ announced a surprise production cut until the end of this year. The Organization of the Petroleum Exporting Countries and its allies (OPEC+)

Major producers in the OPEC+ group announced voluntary production cuts that exceeded one million barrels per day. Saudi Arabia volunteered to reduced its production by 500,000 barrels per day, starting from May until the end of 2023.

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) said the total voluntary production cut will reach 1.66 million barrels per day, when predetermined quotas are added under the previous agreement.

While the International Energy Agency indicated that the decision to cut production threatens to increase the turmoil in the oil market, with the expected shortage of supply already in the second half of this year. Meanwhile, Goldman Sachs raised its forecast for Brent crude to $95 a barrel by the end of the year and $100 for 2024.

Brent crude futures for June delivery rose 6.3%, or $5.04, to close at $84.93 a barrel, after reaching $86.44 during the day. WTI crude for May delivery increased by 6.3%, or $4.75, to reach $80.42 a barrel, after rising earlier today by about 8%.