Surprise OPEC+ production cut lifts oil prices by five percent

Oil prices surged at the start of trading on Monday, rising by around five percent. They are reacting to the surprise announcement of voluntary production cuts by OPEC+, a group that includes members of the Organization of the Petroleum Exporting Countries and their allies, including Russia.

North Sea Brent crude was up 4.9 percent at $83.83 a barrel shortly before 7:30 CEST, having opened at its highest level in nearly a month. US light crude West Texas Intermediate (WTI was up more than five percent at $79.51 a barrel, having opened at its highest level since the end of January.

Saudi Arabia and other OPEC+ members shook the oil market on Sunday by announcing a further production cut of around 1.15 million barrels per day. The group had been expected to stick to the cut of two million barrels per day agreed at the end of last year, Reuters reported. According to Reuters calculations, total OPEC+ cuts now amount to 3.66 million barrels per day (bpd), equivalent to 3.7 percent of global demand.