Oil prices jumped during their trading by more than 5%, after a number of “OPEC Plus” countries announced an unusual production cut, which adds inflationary pressures that may force central banks around the world to keep interest rates higher for a longer period.
Following the rise in oil prices, the main stock market index (TASI) jumped by 170 points, an increase of 1.6%, while the parallel stock market index (Nomu) rose 131 points, or 0.65%, with optimism about the impact of oil prices on companies' results.
Hours after the “OPEC Plus” decision, Goldman Sachs raised its forecast for the price of Brent crude from $90 to $95 a barrel by the end of the year, and also strengthened its price forecast for next year to $100 a barrel instead of $97 in the previous estimate.
“The possibility of oil prices reaching $100 a barrel by the end of the year has certainly increased after these measures,” Daniel Hynes, senior commodities analyst at ANZ, commented on Bloomberg TV.
An official source in the Saudi Ministry of Energy confirmed that this step is a precautionary measure aimed at supporting the stability of oil markets.
And each of the countries «Russia, Iraq, the Emirates, Kuwait, Kazakhstan, Algeria, Oman» voluntarily reduced its production, equivalent to 1.65 million barrels of oil per day, starting from the beginning of next May until the end of the current year 2023, as the share of Saudi Arabia and Russia from the voluntary reduction reached About half a million barrels per day for each of them.
Okaz (Jeddah) @okaz_online