The unexpected 1.15 million barrels per day production reduction by OPEC countries might result in a $10 per barrel increase in global oil prices, according to the chairman of the investment company Pickering Energy Partners.
The production cut would “significantly firm pricing,” according to Dan Pickering, co-founder of the Houston company.
Pickering said in an interview, “We will likely see a $10 (per barrel) jump in oil.”
Before Monday’s OPEC ministerial monitoring meeting, where current production levels were expected to be approved, Saudi Arabia and other producers said they would cut production on their own. The OPEC group said that the measure was intended to promote market stability.