Oil prices surged on Monday after Saudi Arabia and other OPEC+ oil producers announced a surprise round of output cuts, a potentially ominous sign for global inflation just days after a slowdown in US price data had boosted market optimism.
Brent oil futures jumped almost $6 to $85.54 a barrel in hectic early trade on news output would be cut by around 1.16 million barrels per day, while US crude climbed $5.22 to $80.89.Sunday’s development comes a day before a virtual meeting of an OPEC+ ministerial panel, which includes Saudi Arabia and Russia, and which had been expected to stick to 2 million bpd of cuts already in place until the end of 2023.
The latest reductions could lift oil prices by $10 per barrel, the head of investment firm Pickering Energy Partners said on Sunday.
Goldman Sachs lifted its forecast for Brent to $95 a barrel by the end of the year and to $100 for 2024.
