Moscow, April 3: The Oil prices have surged and surpassed USD 85 per barrel after several oil producer countries announced surprise cuts in production, TASS Agency reported. According to the Russian News Agency, this is the first time since March 7 that the price of futures contracts of Brent crude oil surged.

The price of futures contracts of Brent crude oil for June 2023 delivery on London's ICE surpassed USD 85 per barrel. As of 1:09 am Moscow time on Monday, the price of Brent oil went up by 6.43 per cent to USD 85.03 per barrel, according to TASS Agency.

By 1:12 am (Local Time), Brent was trading at USD 85.41 per barrel (6.46 per cent). The price of futures contracts of WTI crude oil for May 2023 delivery went up by 6.21 per cent, to USD 80.37 per barrel. Earlier, the Organization of the Petroleum Exporting Countries (OPEC) Plus oil producers announced further output cuts of around 1.16 million barrels per day.

Riyadh, Saudi Arabia's capital and main financial hub said it would cut output by 500,000 barrels per day, or BDP, from May until the end of 2023, state media reported.

In a statement carried out by the Saudi Press Agency (SPA), the Saudi official emphasised that this is a precautionary measure aimed at supporting the stability of the oil market, according to Emirates News Agency. This voluntary cut is in addition to the reduction in production agreed upon during the 33rd OPEC and non-OPEC Ministerial Meeting, held on 5th October 2022.

The move came as a surprise as OPEC Plus said that they did not intend to make any changes in their policies but this announcement blew everyone, The Washington Post reported.

The alliance produced nearly two million barrels below its supply target in February, the last month for which official output figures are available. "We expect shortfalls to continue," said Ha Nguyen, a global oil analyst for S and P Global Commodity Insights. Oil Prices Now Up over 5% Amid OPEC Decision to Cut Production.

There have been persistent reports that Russia is struggling to keep up production without the benefit of Western service companies that have wound down their operations since the Russian invasion of Ukraine more than a year ago.

Saudi production has also been below its production quota set by the Organization of the Petroleum Exporting Countries in recent months, reported The Washington Post.

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