Oil price surges on production cut by OPEC

The move by Organisation of Petroleum Exporting Countries (OPEC) and other producers of crude oil to cut down production to stop the decline of crude oil prices seems to be working, going by the hardening of crude oil prices in the international market. 

Ever since the decision was announced by OPEC, oil prices have increased by over 15 per cent. Brent crude prices were up by 77 cents at USD 55.87 per barrel, trading as high as $58 and as low as $53. Prices were also supported by falling price of the US dollar during the week. However, these countries have been unable to hold the prices above $55 a barrel for a longer period.

The OPEC countries have cut the production by nearly 1.8 mn barrels per day. Saudi Arabia has slashed it oil production by more than 486,000 barrels per day, while Kuwait has cut down its oil exports by more than 133000 barrels per day. Saudi Arabia’s Energy Minister Khalid al-Falih is optimistic about the move to cut the production.