As the Organization of Petroleum Exporting Countries (OPEC) revealed unexpected monthly supply reductions, crude oil prices increased on Monday.
According to a statement issued by the organization, OPEC on Monday announced a reduction in output at the 48th Joint Ministerial Monitoring Committee (JMMC) meeting.
On Monday morning, Brent crude was trading at $84.53 per barrel as of 11:15 GMT, up $4.64 or 5.8%, after reaching its highest level in a month at $86.44.
West Texas Intermediate crude touched its highest level since late January and was trading at $80.23 per barrel, up $4.56 or 6%.
Saudi Arabia, with a daily reduction of 500,000 barrels, announced the largest among OPEC members.
Together with other OPEC members, it said on Sunday that it will commence “a voluntary reduction” in its crude oil production.
According to a representative of the Saudi Ministry of Energy, the reductions will begin in May and continue through the end of the year.
According to SPA, the cut is in addition to the one OPEC+ announced in October 2022.
The largest cut by OPEC+ since the 2020 COVID pandemic, OPEC and its allies had agreed to reduce oil output by 2 million barrels per day in November when they reached their agreement in October of last year.
Despite pressure from the United States and others urging the organization to raise its output, the decision was made.
According to OPEC, on October 5, 2022, during the 33rd OPEC and non-OPEC Ministerial Conference, the members of the Joint Ministerial Monitoring Committee (JMMC) reaffirmed their commitment to the Declaration of Cooperation (DoC), which extends through the end of 2023.
It was mentioned that this was a preventative action designed to help the oil market remain stable.
The oil cartel urged all participating nations to adhere to the compensation process and achieve complete uniformity.
The Committee observed the overall adherence of participating OPEC and non-OPEC nations with the Declaration of Cooperation after reviewing the crude oil production data for January and February 2023. (DoC).
The oil cartel reported that the meeting took note of the voluntary production adjustments made by Saudi Arabia (500 thousand b/d), Iraq (211 thousand b/d), Kuwait (128 thousand b/d), Kazakhstan (78 thousand b/d), Algeria (48 thousand b/d), Oman (40 thousand b/d), and Gabon (8 thousand b/d) beginning in May and lasting through the end of 2023.
Further to the production changes decided upon at the 33rd OPEC and non-OPEC ministerial meeting, it was stated that these will be implemented.
The aforementioned will be in addition to the voluntary adjustment of 500 000 barrels per day until the end of 2023 that the Russian Federation has already stated. This voluntary adjustment will be made from the average production levels as determined by secondary sources for February 2023.
The total additional voluntary production adjustments made by the aforementioned nations will now amount 1.66 million b/d, according to the oil cartel.