Oil prices stabilized at their highest level in three weeks, Thursday, after the “OPEC +” alliance agreed to reduce crude supplies by about two million barrels per day, in the largest reduction since 2020.
Brent crude futures rose 88 cents, or 0.9%, to $94.25 a barrel by 1519 GMT, after rising 1.7% in the previous session.
US West Texas crude futures rose 79 cents, or 0.9%, to $88.55 a barrel, after rising 1.4% at the close on Wednesday.
On Thursday, US President Joe Biden again expressed his disappointment with the plans announced by the OPEC + countries to reduce oil production. He said that the United States is studying the alternatives available to it.
In response to a question about the “OPEC +” decision, Biden told reporters at the White House: “We are discussing the alternatives that we may have.” “There are a lot of alternatives,” he added. We haven’t made up our minds yet.”
He added about the “OPEC +” decision, “but it is disappointing” and points to problems.
OPEC’s decision
The agreement between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, an alliance known as “OPEC +”, comes before the European Union’s ban on Russian oil, as it will put pressure on supplies in a market already suffering from a lack of supply, which will increase inflation.
Saudi Energy Minister Prince Abdulaziz bin Salman said that the actual supply cut will range between one million and 1.1 million barrels per day. Saudi Arabia’s share of the cut is about half a million barrels per day.
The administration of US President Joe Biden criticized the agreement, describing it as “short-sighted”. The White House said President Joe Biden would continue to assess whether to withdraw more strategic oil stocks to bring prices down.
The White House added that it would consult Congress about additional paths to reduce OPEC + control over energy prices, in a clear reference to legislation that could subject members of the group to antitrust lawsuits.
In a separate context, Russian Deputy Prime Minister Alexander Novak said, on Wednesday, that Russia may reduce oil production, in an attempt to counter the repercussions of the West’s imposition of a ceiling on Russian energy prices due to the Russian invasion of Ukraine.
The US Energy Information Administration said that the withdrawal of US oil inventories last week also supported prices. Inventories fell by 1.4 million barrels in the week ending September 30 to 429.2 million barrels. (Archyde.com)