Following an agreement by OPEC+ to reduce production by nearly 2 million barrels per day, the biggest output cut since 2020, the oil prices increased for the fourth session on Thursday, with Brent reaching a three-week high.
At around 05:16 GMT, the Brent crude futures rose 22 cents, or 0.2%, to reach $93.59 per barrel by 02:34 GMT, after settling 1.7% higher in the previous session. Similarly, the US WTI crude futures also gained 22 cents, or 0.3%, to reach $87.98 per barrel, building on a 1.4% rise on Tuesday.
The agreement between the Organization of Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, comes ahead of a European Union embargo on Russian oil and would squeeze supplies in an already tight market, adding to inflation.
Given that production at some of the OPEC+ countries are below target levels, the actual cut would be smaller than the 2 million bpd reduction agreed to at the meeting.
Saudi Energy Minister Abdulaziz bin Salman said the real supply cut would be about 1 million to 1.1 million bpd, and they were in response to rising interest rates in the West and a weakening global economy.
The administration of US President Joe Biden criticized the deal as being “shortsighted”. The White House said President Joe Biden would continue to assess whether to release further strategic oil stocks to lower prices. – Agencies