OPEC+ countries plan to cut oil production

Oil prices reacted on Monday with a sharp rise to the announced production cut by the oil organization OPEC +. In the morning, a barrel (159 liters) of North Sea Brent for June delivery cost $83.75. That was $3.86 more than on Friday.

The price of a barrel of American West Texas Intermediate (WTI) for delivery in May also rose sharply by $3.69 to $79.36. A barrel of crude oil from the North Sea sometimes cost $86.44 overnight. That is a premium of more than eight percent compared to Friday evening. The reason: the oil alliance Opec+ wants to reduce its oil production.

Nine oil-producing countries from the Opec+ group will reduce their daily production by a total of 1.66 million barrels (159 liters each) in the coming months. This was officially announced by Opec+ on Monday in Vienna after a virtual meeting of its market observation committee.

The day before, the countries involved in the move had surprisingly and individually announced cuts. Eight countries, mainly Saudi Arabia, Iraq, the United Arab Emirates and Kuwait, want to phase out their oil from May. In addition, Moscow announced that the existing restrictive subsidy policy would not expire in June as planned, but would continue from July.

The cuts are a “precautionary measure aimed at supporting the stability of the oil market,” OPEC+ said after the meeting. Kremlin spokesman Dmitry Peskov said in Moscow that the decision was intended to keep prices at a certain level. (sda/awp/dpa)