PHOTO BY SUPPLIED
Oil prices increased due to the Opec+ alliance’s decision to cut production by 2 million barrels per day, its largest production cut since the start of the coronavirus pandemic in 2020.
Oil prices increased by more than 10% over the past week. The move vies to boost the energy market amid a global economic slowdown weighing on fuel demand.
Brent, the benchmark for two-thirds of the world’s oil, was up 0.19 percent at $93.55 a barrel at 8.52 am UAE time on Thursday. West Texas Intermediate, the gauge that tracks US crude, was trading 0.18 percent higher at $87.92 a barrel.
Opec+ said at the meeting that its decision was made in “light of the uncertainty that surrounds the global economic and oil market outlooks, and the need to enhance the long-term guidance for the oil market, and in line with the successful approach of being proactive and pre-emptive.”
The new reduced output is larger than many members’ existing production levels due to Opec+ producers’ inability to reach their targets.
Most of the cuts will be made in Saudi Arabia and Russia, whose objectives will each be reduced to 526,000 bpd, or more than half of all cuts.
After the Opec+ decision, UBS analysts Wayne Gordon and Giovanni Staunovo said in a research note that they still had a favorable outlook for oil prices.
Oil producers agreed to extend their alliance beyond the end of this year and into 2023 at their meeting on Wednesday.
Ministerial meetings will now occur every six months instead of monthly, but the group stated it reserves the right to hold a special session if market circumstances warrant it. BKM/ Expat Media
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