Key Takeaways:
Members of the Organization of the Oil Exporting Countries (OPEC+) unexpectedly declared a curb in world output by over 1.6 million barrels per day on 2nd April
The decision quickly rippled across global oil markets, instantly causing the oil price to increase by 5%
The market has suggested a diverse spectrum of intentions behind the production cut, ranging from worries of weaker economic growth and demand from Western countries, to suppressing unwarranted wagers against crude prices
The supply cut risks aggravate the oil supply deficit in 2H23, boosting oil prices at a time of heightened economic uncertainty. The collision with the central bank’s intention to restrain demand creates macro concerns for inflation and future interest rate hikes
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