Oil prices rose Monday morning in Asian trade after the Organization of Petroleum Exporting Countries and its Allies known as OPEC+trimmed Oil production up 1.16 million barrels per day from May in a surprise move.

What happened: Saudi Arabia will voluntarily cut production by 500,000 bpd from May to the end of 2023. The voluntary cuts will start in May and last until the end of the year. The commitments bring the total volume of OPEC+ reductions to 3.66 million bpd, or 3.7% of global demand, according to Reuters calculations.

Also read: The best oil ETFs

West Texas Intermediate (WTI) Futures expiring in May rose 5.3% to $79.67 a barrel Brent Futures expiring in June were up 5.18% and trading at $84.03 a barrel at the time of writing.

The US Oil ETF USO had closed 1.71% higher on Friday during the Energy Select Sector SPDR Fund XL had ended up 0.69% last week prior to the announcement. Other ETFs that are expected to attract attention as they develop include, among others Vanguard Energy Index Fund ETF VDE, SPDR S&P Oil & Gas Equipment & Services ETF XES And Invesco S&P SmallCap Energy ETF PSCE.

Expert Take: Giacomo Romeoan equity analyst with Jefferies, told Bloomberg said the new cut, if fully implemented by the group, should allow for a material inventory reduction as early as the second quarter. That’s ahead of the third quarter, as previously expected, he said.

In October 2022, OPEC+ decided to cut production by two million barrels a day from November through the end of the year, a move that had angered Washington.

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