Brent oil trades above $83 a barrel amid OPEC+ decision to cut production

Brent crude is trading above $83 per barrel, quotes were supported by the decision of the countries participating in the OPEC + agreement to reduce oil production. According to trading data on the ICE Intercontinental Exchange, Brent is trading at $83.53 per barrel as of 8:44 Moscow time. Futures for WTI oil traded at $79.1 per barrel.

At the same time, over the past few days, quotes have slightly decreased: on April 2, the cost of a barrel of Brent on the stock exchange reached $86.2. However, the positive effect of the OPEC + decision is still not exhausted, the quotes are significantly higher than the March lows, when futures for oil of this brand were trading at almost $70 per barrel.

On April 2, 8 of the 20 OPEC+ countries announced a decision to voluntarily cut oil production from May until the end of the year. According to Interfax, the total reduction in production will be about 1.657 million barrels per day, Russia and Saudi Arabia are cutting production by 500,000 b/d each. Also, production is reduced by Kazakhstan, Oman, the UAE, Kuwait, Iraq, Algeria and Gabon.

Deputy Prime Minister of the Russian Federation Alexander Novak notedthat the decision is due to the ongoing banking crisis in the US and Europe, global economic uncertainty, and “unpredictable and short-sighted” energy policy decisions.

February 10 Novak declaredthat Russia will voluntarily reduce oil production in March by 500,000 barrels per day (excluding condensate). The Deputy Prime Minister explained that the reduction would contribute to the “recovery of market relations” in the face of sanctions, further decisions on production volumes would depend on the “situation on the market.” As a result, the restriction was extended until the end of 2023.