Oil prices surge after Saudi Arabia and other OPEC+ producers announced a production cut. The oil production will be brought down by 1.15 million barrel per day. The OPEC group announced the cut ahead of OPEC ministerial monitoring meeting.
The group said that the production cut is a precautionary measure targeted toward stabilizing the oil market. The voluntary cuts will start from May to end 2023.
Immediately after the announcement, the oil price surged almost 6% in Asian trade open on Monday. As per economic Times, the West Texas Intermediate contract jumped 5.74% to $80.01 a barrel, while Brent jumped 5.67% to $84.42.
This is the biggest cut output since the OPEC+ cartel slashed two million barrels per day in October. The announcement came after Russia decided to extend a cut of 5,00,000 barrels per day as a retaliation move to West's sanctions.