The global oil market experienced a notable surge in prices recently, marking the largest increase in nearly a year. This significant upward trend was largely driven by the decision of the Organization of the Petroleum Exporting Countries (OPEC+) and Saudi Arabia, who announced on Sunday that they are set to reduce their production by an additional 1.16 million barrels per day until the end of the calendar year.
This new production cut will take effect in May, and will result in a total reduction of 3.66 million barrels per day, which represents roughly 3.8% of the overall global demand.
Meanwhile, the United States has expressed a need for lower oil prices in order to support economic growth, citing the potential impact on inflation.
The market for oil has experienced a noteworthy decrease in supply, despite the recent fluctuations in pricing. This development comes at a time when predictions suggest that the market would face tight supply towards the end of the year.
Meanwhile, oil futures observed a surge of up to 8% in New York on Monday, with gasoline prices also increasing. These inflationary pressures could potentially prompt central banks worldwide to sustain higher interest rates for an extended period.