As the Organization of the Petroleum Exporting Countries (OPEC) member states unexpectedly announced a sharp production cut, the international crude oil futures prices rose by more than 6% at the close of the third day.
As of the close of the day, the price of light crude oil futures for May delivery on the New York Mercantile Exchange increased by $4.75 to close at $80.42 per barrel, an increase of 6.28%. The price of London Brent crude oil futures for June delivery increased by $5.04 to close at $84.93 per barrel, an increase of 6.31%.
On the 3rd, OPEC announced that at a meeting held on the same day, the Joint Technical Committee of OPEC and non OPEC oil producing countries noted that OPEC member states announced on the 2nd a voluntary production reduction plan of 1.157 million barrels per day starting from May, which is a preventive measure taken to stabilize the oil market. Combined with Russia’s average daily production reduction of 500000 barrels by the end of this year, the total voluntary reduction in production by major oil producing countries will reach approximately 1.66 million barrels per day.
Vivek Dahl, an energy commodities analyst at the Federal Bank of Australia, said that the latest decision by OPEC member states suggests that the effect of production cuts may be stronger than in the past.
UBS Group continues to maintain a positive outlook for oil prices, with Brent oil prices expected to reach $100 per barrel in June of this year.