Oil prices surged on Monday, posting the biggest daily rise in nearly a year, after a surprise announcement by OPEC+ to cut more production rattled markets.
Brent crude was trading at $83.89 a barrel, up $4, or 5%, after touching the highest in a month at $86.44 earlier in the session, Moneyusa.news.com reported.
US West Texas Intermediate crude was at $79.39 a barrel, also up by about $4, or 5%, after earlier hitting the highest level since late January.
OPEC and their allies, including Russia, shook markets by announcing further production cuts of about 1.16 million barrels per day on Sunday.
The group, known as OPEC+, had been expected to maintain its earlier decision to cut output by 2 million bpd until December at its monthly meeting on Monday.
The pledges bring the total volume of cuts by OPEC+ to 3.66 million bpd, according to Reuters calculations, equal to 3.7% of global demand.
As a result, Goldman Sachs lowered its end-2023 production forecast for OPEC+ by 1.1 million bpd and raised its Brent price forecasts to $95 and $100 a barrel for 2023 and 2024, respectively, its analysts said in a note.
Goldman Sachs estimated the output reduction could provide a 7% boost to oil prices, contributing to higher Saudi and OPEC+ oil revenues.
