Oil prices rose today, Monday, 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.
According to Reuters, the OPEC + alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, caused a shock in the markets by announcing a larger production cut by about 1.16 million barrels per day yesterday, 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 today, 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 percent 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 in a note.
