Ryan Payne, President of Payne Capital Management, shares his market optimism and reacts to widespread layoffs in the tech sector.
A group of OPEC+ member countries on Sunday announced voluntary oil production cuts that will apply from May until the end of this year.
The surprise move involves cuts of about 1.15 million barrels per day (BPD) and was led by Saudi Arabia, Iraq, the United Arab Emirates and Kuwait. Saudi Arabia’s Energy Ministry said in a statement the production cut was “a precautionary measure aimed at supporting oil market stability”.
The move is likely to cause oil prices to rise as production falls, which in turn would negatively impact consumers if gasoline prices rise. According to the AAA, average gas prices in the US rose about 13 cents last month to $3.50 a gallon.
THE USA OVERTOP RUSSIA AS EUROPE’S TOP SUPPLIER OF CRUDE OIL
Several OPEC countries and the partner coalition OPEC+ announced oil production cuts of more than 1 million barrels per day that will run from next month to the end of this year. (AP Photo / Lisa Leutner / File / AP Newsroom)
Five members of the Organization of the Petroleum Exporting Countries (OPEC) — Saudi Arabia, Iraq, UAE, Kuwait and Algeria — have been backed by two OPEC+ countries that are not official members of the oil cartel but are often involved in the group’s actions.
The five OPEC members will make the biggest cuts in their oil production, with Saudi Arabia cutting 500,000 BPD, Iraq cutting 211,000 BPD, the United Arab Emirates cutting 144,000 BPD, Kuwait cutting 128,000 BPD and Algeria cutting 48,000 BPD.
The two OPEC+ countries involved in the production cut – Kazakhstan and Oman – will cut 78,000 BPD and 40,000 BPD respectively.
RUSSIAN OIL WAS DIVERTIVED TO ‘FRIENDLY’ COUNTRIES WITHOUT A DROP IN SALES, OFFICIALS CLAIM
A crude oil pump siphon is seen in the Permian Basin in Loving County, Texas on November 22, 2019. (Portal/Angus Mordant)
The latest oil production cuts come on top of OPEC+ output cuts of 2 million BPD announced in October.
Russia earlier announced a unilateral production cut of 500,000 BPD in February through the end of the year after western countries imposed a price cap of $60 a barrel on Russian oil as part of a package of sanctions over the invasion of Ukraine.
The US has lobbied oil-producing countries to increase supply and support lower energy prices in order to sustain economic growth while curtailing a key source of revenue that Russia uses to fund its war effort. The Biden administration criticized the recent OPEC+ announcement, with a National Security Council spokesman telling Portal: “We do not believe that cuts are prudent given the market uncertainty at this time – and we have made that clear.”
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Oil prices fell below $67 a barrel in mid-March, hitting a 15-month low amid the latest banking crisis caused by the collapse of two US firms and the plight of Credit Suisse, which led to its takeover by UBS. Since hitting the low of $66.74 on March 17th, oil prices have recovered to close at $75.70 on March 31st.
OPEC+ is scheduled to hold a virtual meeting on Monday.
Portal contributed to this report.