A cut in oil production could hit pump prices (pic: Terry Murden)

Oil prices are expected to rise after some of the world’s biggest exporters announced a surprise cut in production.

OPEC, which is led by Saudi Arabia, Iraq and the Gulf states, will cut 1.15m barrels per day.

This is in addition to the 2m barrels per day cuts agreed last November, which will kick in from next month.

They argue that it is aimed at supporting market stability following volatility across the financial sector.

“OPEC is taking pre-emptive steps in case of any possible demand reduction,” Amrita Sen, founder and director of Energy Aspects told Reuters.

The US was alarmed by the move after called for producers to increase output in order to ease the cost of energy on the economy.

High energy and fuel prices have been big factors in driving up inflation and this latest action could knock hopes for it to fall.

Responding to news of the latest cuts, a spokesperson for the US National Security Council said: “We don’t think cuts are advisable at this moment given market uncertainty – and we’ve made that clear.”

Brent Crude has settled below last year’s three-digit prices and is now trading at about $80 per barrel and WTI Crude at $75 per barrel.