The oil alliance OPEC+ has announced a surprising reduction in oil production. From May onwards, production is expected to be around one million barrels (159 litres each) per day lower. Saudi Arabia led the cartel on Sunday with a production cut of 500,000 barrels per day. The Saudi Ministry of Energy said it was a "voluntary cut," writes the Saudi Press Agency.

Other members such as Kuwait, the United Arab Emirates and Algeria followed suit, while Russia wants to continue its production cuts until the end of 2023. This cut came into force in March and was supposed to expire at the end of June.

The surprising announcement caused the price of the barrel of Brent North Sea oil to climb by four dollars to around 84 dollars. The price of American light oil (WTI) rose slightly less sharply to just under 80 dollars. In mid-March, the Brent price had fallen below 73 dollars to its lowest level since the end of 2021, but since then it has risen again.

With the production cut, around one million barrels of crude oil per day less are likely to flow onto the market from May onwards than previously expected. From July, it would be more than one and a half million barrels less, as from that point on the Russian production cut will be added. The OPEC+ alliance of 23 countries consists of the members of the OPEC cartel and other countries such as Russia and has a market share of about 40 percent.

The current step comes as a surprise not only because changes in production usually take place after fixed consultations. In addition, the OPEC countries had signaled constant production until recently. Just a few weeks ago, Saudi Energy Minister Abdulaziz bin Salman stressed that OPEC+ wanted to maintain its production target by the end of the year.

As a result, the prices of US government bonds fell because a higher oil price leads investors to fear that this will create new inflationary pressures and thus interest rates could rise further. Higher oil prices created a difficult environment for European corporate bonds, Unicredit said. The weaker performance of the Bund future is likely to dampen appetite for bonds in general in the short term.

The reduction in subsidies had less of an impact on share prices. Japan's Nikkei index rose 0.5 percent in the wake of a strong Wall Street on Friday, while Hong Kong's Hang Seng index declined.

While futures trading for Wall Street currently signals a well-maintained opening, the German stock market started trading 0.2 percent lower.

Goldman Sachs analysts raised their forecast for the price of Brent to $95 a barrel for the end of the year and $2024 for 100. "Today's surprise cut is consistent with the new OPEC+ doctrine of preemptively acting because they can do so without significant loss of market share," Goldman Sachs announced. "This cut, while surprising, reflects important economic and probably political considerations."