Prices Rise on News of OPEC+ Production Cuts
April 3, 2023
The Baker Hughes Rig Count had oil rigs down 1 to a total of 592 and last year at this time there were 533 oil rigs in operation. Crude oil production continues to hover right around 12 million barrels per day.
Energy markets were higher on the day Friday as the market tries to establish and uptrend, but the bulls still have work to do to take out key resistance levels.
The bulls got some help from OPEC+, on Sunday the day before OPEC+’s advisory Joint Ministerial Monitoring Committee was set to meet April 3rd, Saudi Arabia, and other member of the OPEC+ alliance announced a 1.1 million bpd oil production cut. This news sent the Sunday night markets when the opened ten cents higher on gas and diesel and 5 dollar per barrel higher on crude oil.
Prices did easy back some but are now holding gains as the normal work week is about to begin. This will certainly be the news of the day as traders dig into more of the details.
This is supposedly not a quota change and the thought is that these barrels are coming offline and these barrels along with Russia’s plan to extend a 500,000-bpd cut will impact oil balances.
It is worth noting that right now OPEC is currently not meeting it current targets. The latest example is a 70,000 bpd drop in output in March, making the shortfall versus the quota to 926,000 bpd.