An unexpected cut in crude oil production by OPEC Plus will push oil prices above $100 per barrel in the world market.
According to the British news agency Reuters, after the decision of OPEC and Russia to further reduce the production of crude oil, the price of oil in the world market recorded an increase of 4 barrels per dollar on Monday.
OPEC Plus had announced that the organization will cut crude oil production by more than 1.6 million barrels per day from May.
After the latest announcement, the total reduction in oil production by OPEC Plus since November last year has reached 3.6 million barrels.
OPEC Plus was expected to keep oil production at current levels this year, having already cut 2 million barrels in November 2022.
Rystead Energy says the latest cut in oil production will boost global demand and push oil prices above $100 a barrel.
Rystead Energy further said that the price of Brent crude will likely go up to $110 per barrel.
UBS also says oil prices will reach $100 a barrel by June, while Goldman raised its December forecast for oil prices by five dollars to $95 a barrel.
According to an official of a South Korean refiner, the drop in crude oil production is bad news for oil buyers. According to him, OPEC is trying to protect its profits in view of the fear of slowdown in the global economy.
Saudi Arabia says its decision to voluntarily cut production is a precautionary measure to ensure market stability.
Oil traders say oil purchases by China, the world’s biggest oil importer, are likely to reach record levels in 2023 as China recovers recently from the coronavirus and top oil-importing countries. Demand is high in India, ranked third.