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Oil prices rise after OPEC+ agrees to slash crude output

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Commodities 12 minutes ago (Oct 05, 2022 08:50PM ET)

Oil prices rise after OPEC+ agrees to slash crude output © Reuters. FILE PHOTO: An aerial view shows tugboats helping a crude oil tanker to berth at an oil terminal, off Waidiao Island in Zhoushan, Zhejiang province, China July 18, 2022. cnsphoto via REUTERS

By Laila Kearney

(Reuters) – Oil prices edged up in early Asian trade on Thursday after OPEC+ agreed to further tighten global crude supply with a deal to slash oil production by about 2 million barrel per day.

The agreement between the Organization of Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, would squeeze supplies in an already tight market.

futures rose 46 cents, or 0.5%, to $93.83 per barrel by 0027 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up 45, or 0.5%, cents at $88.21 per barrel.

Saudi Arabia, the group’s de facto leader, said the cuts – equal to about 2% of worldwide supply – were in response to rising interest rates in the West and a weakening global economy.

The administration of U.S. President Joe Biden has criticised the deal as being “shortsighted.”

The White House said it would consult with Congress on additional paths to reduce the cartel’s control over energy prices in an apparent reference to legislation that could expose members of the group to antitrust lawsuits.

Separately on Wednesday, Russian Deputy Prime Minister Alexander Novak said Russia may cut oil output in an attempt to offset the effects of price caps imposed by the West over Moscow’s actions in Ukraine.

A draw in U.S. oil stockpiles last week also supported prices. Crude inventories dropped by 1.4 million barrels in the week ended Sept. 30 to 429.2 million barrels, the Energy Information Administration said. [EIA/S]

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