OPEC's Cut in Oil Production Will Increase Pump Prices

World crude oil prices skyrocketed about 4 percent at the close of trading last week.

As reported by Reuters on Monday (10/10), the increase in oil prices was driven by the decision of OPEC and its allies (OPEC +) to cut production.

This cut is expected to be the largest since 2020 and comes amid fears of a recession and rising interest rates.

The price of US West Texas Intermediate (WTI) crude oil rose US$4.19, or 4.7 percent, to US$92.64 per barrel. Meanwhile, Brent oil futures rose $3.50, or 3.7 percent, to $97.92 per barrel.

The current increase in oil prices is also the highest since late August. Additionally, both contracts posted their second straight weekly gain and their biggest weekly percentage gain since March.

Noted, Brent rose about 11 percent. Meanwhile, WTI jumped 17 percent higher.

Previously, OPEC + will cut oil production to 2 million barrels per day, equivalent to 2 percent of global oil demand starting next November.

In a statement quoted by CNN.com, OPEC+ said the production cuts were made to offset the uncertainty of the global economy and oil market.

For information, global oil prices have been tinged with uncertainty lately. In the first half of this year, oil prices jumped to the level of US$139 per barrel.

The spike occurred due to the war between Russia and Ukraine. But after that, world oil prices immediately collapsed.

Brent oil prices, for example, have fallen 20 percent since the end of June. The decline was triggered by market concerns over the condition of the world economy which would be hit by a recession due to the recent surge in inflation.