OPEC decides to cut further oil production

On Monday, oil benchmarks experienced a 6% increase, following the announcement from OPEC+ that they planned to cut further production. This decision raised concerns of a possible reduction in demand, should oil refiners be reluctant to pay higher prices for crude. Brent crude settled at $84.93 a barrel, a 6.3% increase, while West Texas Intermediate crude settled at $80.42 a barrel, also up by 6.3%. 

The OPEC+ group's production cuts were described as a precautionary measure, with weakening economies and rising oil stockpiles supporting the decision. Despite this, most analysts raised their Brent oil price forecasts to around $100 per barrel by year-end, which could lead to more aggressive interest rate hikes and gradually push economies closer to a recession. While people are unlikely to stop driving or travelling by plane because of high oil prices, the long-term demand for energy could decline if oil refiners lower their activity to counter rising input costs, resulting in lower refining output and higher prices at the pump.