OPEC Oil Production Reduction Likely To Send Fuel Prices Up Again

5th June 2023

Saudi Arabia and other Opec+ members have announced voluntary cuts to their oil production of about 1.15m barrels a day in a surprise move they said was aimed at supporting market stability.

OPEC observers also say the group needs nominal oil prices to be higher because of money printing by the West in recent years has lowered the value of the U.S. dollar. That means OPEC needs to protect its revenues from its main export product, which trades in dollars.

The group known as OPEC+ announced Sunday it would cut oil production by more than 1.6 million barrels a day running through the end of the year.

Fuel price increases are likely to feed through to the inflation figures at a very sensitive time for interest rates.