Oil prices rose on Monday after several oil-exporting countries announced a production cut in May, billed as a “precautionary measure” to stabilize the market.
At the opening of the Asian markets, the barrel of North American WTI rose 5.74% to 80.01 dollars (74.05 euros) and the barrel of North Sea Brent rose 5.67% to 84.42 dollars (78.14 euros).
The cut announced on Sunday by Iraq, Algeria, Saudi Arabia, the United Arab Emirates (UAE), Oman and Kuwait will begin in May and last until the end of the year.
In total, it will mean a production cut of around one million barrels per day (bpd), the biggest reduction since October.
Riyadh will cut output by 500,000 bpd, Iraq by 211,000 bpd, the United Arab Emirates by 144,000 bpd, Kuwait by 128,000 bpd, Algeria by 48,000 bpd and Oman by 40,000 bpd, the respective official news agencies said.
All the cuts will take place from May until the end of 2023, “in coordination with some OPEC countries [Organização dos Países Exportadores de Petróleo] and not from OPEC,” according to the Algerian Ministry of Energy.
Oil demand is threatened by the “prospect of high inflation and recessionary pressures,” said an analyst with the Middle East Economic Survey, Yesar al-Maleki, who also blamed the turmoil on the bankruptcy of US bank SVB and the Credit Suisse bailout.
Source: TSF
