Oil prices soared nearly 6% on Monday after Saudi Arabia and other major oil producers said they will cut production by 1.15 million barrels per day from May until the end of the year, per the AP. The move by members of the so-called OPEC+ group of oil exporting countries raises new concerns about inflation and further complicates the Federal Reserve's mission to keep it in check, reports CNBC. Quartz describes the decision as a surprise. The cuts in oil output immediately pushed prices higher and were expected to boost gas prices, adding to strains in many countries where high fuel prices are a heavy burden.
“This will create both political waves across Europe and even higher general inflation in the USA, leading to renewed pressure on the Federal Reserve to keep hiking rates aggressively,” Clifford Bennett, chief economist at ACY Securities, said in a report. US benchmark crude oil rose $4.24 to $79.91 per barrel, or 5.6%, in electronic trading on the New York Mercantile Exchange. It rose $1.30 to $75.67 per barrel on Friday, ahead of the weekend meeting. The cuts are in addition to a reduction announced last October that infuriated the Biden administration.
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