Oil prices rise on the back of surprise OPEC+ cuts

Brent and U.S. crude have both gained more than 6% this week after the Organisation of Petroleum Exporting Countries (OPEC) and allies including Russia - a group known as OPEC+ pledged a surprise production cut of a further 1 million barrels per day in a bid to push up prices in a meeting held on Sunday.

Following news of the production cuts by OPEC and its allies, Goldman Sachs expects Brent to trade at $95 a barrel by the end of this year, higher than its previous $90 estimate, and $100 in 2024 compared with a previous $97 forecast.

"Opec+ has very significant pricing power relative to the past given its elevated market share, inelastic non-Opec supply, and inelastic demand" the investment bank's analysts wrote in a research note last week.

Brent will average $90 per barrel during the course of this year amid tightening supply, Riyadh-based Jadwa Investment said in a note on Thursday.

"The main positive is the revival of China’s economy, which ... will rejuvenate the country’s demand for oil and other commodities," it said. "This is offset by growing signs of distress in the US economy, which is beginning to struggle under the weight of cumulative interest rate increases."

Oil prices fell in recent weeks after the collapse of Silicon Valley Bank and Signature Bank in the US and a crisis at Switzerland's Credit Suisse, which resulted in the bank’s acquisition by larger rival UBS in an emergency rescue deal.

All focus now leans to the evolving economic landscape and how resilient the global economy is to avoiding a recession which in turn will shape overall demand during the second quarter.

Fuel card users can expect to see a rise in the region .70 pence per litre for the second week of April.

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