A jump in oil prices after a sudden announcement by OPEC to cut production

Oil prices rose Monday, April 3, recording the largest daily increase in nearly a year, after the sudden announcement of the OPEC + alliance to cut production further confused the markets.

Brent crude jumped $4.33, or 5.4%, to $84.22 a barrel by 0900 GMT, after touching a one-month high of $86.44 earlier in the session.

US West Texas Intermediate crude also rose $4.17, or 5.5%, to $79.84 a barrel, after earlier hitting the highest level since late January.

The OPEC + alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, rattled the markets by announcing a deeper production cut of about 1.16 million barrels per day on Sunday.

The OPEC+ alliance was expected to maintain its previous decision to cut production by two million barrels per day until December at its monthly meeting on Monday.

The new announcement takes the total OPEC+ production cuts to 3.66 million barrels per day, according to Reuters calculations, equivalent to 3.7% of global demand.

As a result, Goldman Sachs cut its forecast for OPEC+ production by the end of 2023 by 1.1 million barrels per day and raised its forecast for the Brent crude price to $95 a barrel in 2023 and $100 in 2024, it said.
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