Oil prices soar as Saudi Arabia, Kuwait, UAE, other oil producers announce output cuts

Oil prices soar as Saudi Arabia, Kuwait, UAE, other oil producers announce output cuts

The production cuts immediately pushed prices higher and were expected to also lead to higher gas rates

By AP Published: Mon 3 Apr 2023, 9:09 AM Last updated: Mon 3 Apr 2023, 9:19 AM

Oil prices soared more than 5% after Saudi Arabia and other major oil producers said they will cut production by 1.15 million barrels per day from May until the end of the year. Shares in Asia were mixed on Monday and the dollar rose against the Japanese yen.

US benchmark crude oil rose $4.14 to $79.81 per barrel, or 5.5%, in electronic trading on the New York Mercantile Exchange. It rose $1.30 to $75.67 per barrel on Friday, ahead of the weekend meeting where members of the so-called OPEC+ group of oil exporting countries decided on the cuts, which are in addition to a reduction announced last October that infuriated the Biden administration.

The cuts immediately pushed prices higher and were expected to also lead to higher gas prices, adding to strains in many countries where high fuel prices are a heavy burden. Higher oil prices also will complicate the efforts by central banks to rein in inflation.

“This will create both political waves across Europe and even higher general inflation