Global Oil Prices Surge

📈 Oil Prices soared after unexpected cuts to crude output threatened to unleash a fresh bout of inflation onto the world’s markets.

📊 As the oil cartel Opec promised to reduce output by more than 1 million barrels per day, West Texas Intermediate (WTI) jumped as high as 8% in early trading and stood above $79 per barrel. Brent crude went up about 5% to $84.

🇷🇺 Markets were taken aback by Opec’s plan to reduce production by more than 1 million barrels per day, with Saudi Arabia promising to cut 500,000 barrels per day alone. Russia pledged to cut production alongside the oil cartel as oil-rich nations sought to boost demand in a faltering global economy.

📆 Crude suffered its worst first-quarter drop since 2020 in the first part of this year, as traders weigh up China’s rebound against the threat of a banking crisis and strikes rocking France.

🇸🇦 “Today’s move, like the October cut, can be read as another clear signal that Saudi Arabia and its Opec partners will seek to short circuit further macro selloffs,” RBC Capital Markets analysts said. “This decision will certainly not be welcomed by the White House.”

🏦 Higher oil prices present a renewed risk of inflation, analysts said, warning it would put further pressure on central banks such as the Bank of England to raise rates. Economists had expected the Bank of England to hold rates at its meeting next month.

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