Share prices of oil producers bounced as crude prices rose, following the surprise OPEC+ decision to cut output this year, Ben writes.

Driving the news: Companies seeing gains Monday included huge independents like Marathon Oil (roughly 10%) and ConocoPhillips (9%), and majors Chevron (4%) and Exxon (6%), to name a few.

What they’re saying: Multiple analysts raised their 2023 price forecasts and see OPEC+ looking to keep Brent crude above $80 per barrel.

Threat level: The International Energy Agency said oil markets were already slated to tighten this year.

  • The new cuts “risk exacerbating those strains and pushing up oil prices at a time when strong inflationary pressures are hurting vulnerable consumers.”

How it works: One thing that may have swayed OPEC: confidence that they won’t prompt a U.S. supply surge that blunts the price increases.

  • “The U.S. shale industry … seems stuck on a lower growth trajectory, and the limited threat of a shale supply response may have emboldened OPEC+,” writes Ben Cahill of the Center for Strategic and International Studies.

The intrigue: The White House response was mild compared with anger over OPEC+ cuts announced last October ahead of the midterm elections and amid higher energy prices.

  • The National Security Council’s John Kirby told reporters the new cuts are not “advisable” given “market uncertainty.”
  • But he noted the U.S. “strategic partnership” with Saudi Arabia despite disagreement with specific decisions.