After hearing that oil producers will cut production by about 1.16 million barrels per day, prices went up.

Oil prices went up after Saudi Arabia and other OPEC+ producers announced a surprise round of output cuts. This could be a bad sign for global inflation just days after a slowdown in US price data had given the market hope.

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When it was announced that production would be cut by about 1.16 million barrels per day, Brent oil futures rose $4.30 to $84.19 per barrel, while US crude rose $4.17 to $79.84.

The change comes before a virtual meeting of an OPEC+ ministerial panel that includes Saudi Arabia and Russia.

Vivek Dhar, an energy analyst at CBA, said, "The involvement of the biggest OPEC+ members suggests that production cuts may be followed more closely than in the past."

"This means that, starting in May, around 1 percent or more of the world's oil supply could be cut off,"


The head of the investment firm Pickering Energy Partners said on Sunday that the latest cuts could cause oil prices to go up by $10 per barrel.


Goldman Sachs raised its prediction for the price of a barrel of Brent to $95 by the end of the year and $100 by 2024.


Goldman Sachs said, "Today's surprise cut is in line with the new OPEC+ doctrine that they should act ahead of time if they can do so without losing a lot of market share."


"This cut is surprising, but it has to do with important economic and probably political factors."


Even though core US inflation slowed on Friday, which helped Wall Street end the month on a strong note, the price of energy went up a lot. This week, the central banks of Australia and New Zealand meet to discuss policy. The New Zealand central bank is expected to raise rates by another quarter point, to 5%.

After 10 straight rate hikes, the markets are betting that the Reserve Bank of Australia (RBA) will stop raising rates, but analysts are split on whether it might still go up.

SOURCE: NEWS AGENCIES