April 4 (Lagos) - The Organization of Petroleum Exporting Countries (OPEC+) let by its de-facto leader Saudi Arabia announced crude oil production costs to the tune of 1.16 million barrels per day. The reason for the output cut is to stabilize the market.
Analysts were left shocked by this development especially the ones in the US because their government has been asking OPEC to increase production in order to reduce crude oil price.
US President had travelled to Saudi Arabia last year to request the kingdom to increase crude oil production. The outcome of that meeting does not seem to have gone according to plan. Price of petrol at the pump in US had only recently returned to levels prior to the Russia-Ukraine war but now it is expected that petrol & Diesel prices will increase according to some analysts reacting to this news.
The output cut will mostly be absorbed by Saudi-Arabia while UAE, Kuwait and Iraq will also make up rest of the cuts. Nigeria is not affected because the country cannot meet its production quota for quite some time now.
Price of NYMEX WTI crude oil futures jumped more than 5% to $79.60 per barrel for May delivery. Brent oil futures jumped $5.16 to $85.05 a barrel at the time of writing this article.
Goldman Sachs lifted its forecast for Brent crude oil to $95 a barrel by the end of the year and to $100 for 2024.
reporting for easykobo.com on Monday, April 3 2022 from Lagos, Nigeria