Oil prices rose for a fourth session on Thursday, with Brent at a three-week high, as OPEC+ agreed to further tighten global crude supplies by cutting output by about 2 million barrels a day. The reduction was made, which is the biggest reduction since 2020.
Brent crude futures for December settlement were up 22 cents, or 0.2%, at $93.59 a barrel by 0234 GMT after settling 1.7% higher in the previous session.
U.S. West Texas Intermediate (WTI) crude for November delivery added 22 cents, or 0.3 percent, to $87.98 a barrel, up 1.4 percent on Tuesday.
The agreement between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, comes ahead of an EU ban on Russian oil and squeezes supplies in an already tight market. will be given, which will increase inflation.
Given that production in some of the OPEC+ countries is below target levels, the actual cut will be less than the 2 million bpd reduction agreed at the meeting.
Saudi Energy Minister Abdulaziz bin Salman said the actual supply cuts would be about 1 million to 1.1 million bpd and were in response to rising interest rates in the West and a weakening global economy.
US President Joe Biden’s administration has criticized the deal as “short-sighted”. The White House said President Joe Biden would continue to evaluate whether to release more strategic stocks to help lower oil prices.
The White House said it would consult with Congress on additional ways to loosen OPEC and its allies’ controls on energy prices, apparently over legislation that would expose the group’s members to antitrust lawsuits. can do.
“The final market impact will depend on the duration of the agreement, as OPEC+ decided in its announcement to extend cooperation until the end of 2023,” Citi analysts said in a note. It added that supply cuts will keep global inventories low for a prolonged period and tighten markets in 2023.
More than half of the 1 million bpd supply cut is expected to come from Saudi Arabia, the world’s top exporter, analysts at RBC Capital said.
Separately on Wednesday, Russian Deputy Prime Minister Alexander Novak said Russia may cut oil production in an effort to offset the impact of Western-imposed price caps on Moscow’s actions in Ukraine.
A draw in US oil inventories last week also supported prices. Crude inventories fell 1.4 million barrels to 429.2 million barrels in the week ended Sept. 30, the Energy Information Administration said.
