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Oil prices jumped more than 5% on Monday April 3. The barrel of Brent, the world reference, goes for 84 dollars, that of American WTI is close to 80 dollars. A sharp rise after mid-March Brent fell to its lowest level in two years. A decline that then hinted at a respite on the inflation front.
The explanation for this new surge is simple: several major producing countries have agreed on production cuts. Algeria, Iraq, Saudi Arabia, the United Arab Emirates, Oman and Kuwait will reduce their production from May until the end of the year. In total, a million barrels per day less will arrive on the market, Ryad alone represents half of this drop.
A bigger cut
This new cut in world production is the largest since the one decided in October by OPEC+, a cut then of 2 million barrels per day. And this is a new snub for Washington because the United States called on the contrary to increase oil extraction in an attempt to limit inflation. Inflation which, of course, is slowing down, but remains at high levels. However, at the same time, after his policy zero-Covid “, China, the greediest country in black gold, is reopening its economy, enough to create a breath of fresh air.
Measurement of ” precaution »
And it is this same inflation which would have led the oil giants to put the pedal soft. According to one analyst, oil demand remains threatened by inflation and recessionary pressures. Ryad refers to a measure of ” precaution to support oil market stability “. Moscow also believes that these cuts are in the interest of the global market.
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