Oil rises 2% as OPEC+ focuses on supply cuts

Alliance’s move outweighs recession, Covid concerns

NEW YORK:

Oil rose over 2% on Tuesday after top exporter Saudi Arabia said OPEC+ was sticking with output cuts and could take further steps to balance the market, outweighing global recession worries and concern about China’s rising Covid-19 case numbers.

Saudi Arabian Energy Minister Prince Abdulaziz bin Salman on Monday was quoted by state news agency SPA as denying a Wall Street Journal report that sent prices plunging by more than 5%, saying the Organisation of the Petroleum Exporting Countries (OPEC) was considering boosting output.

Brent crude rose $1.83, or 2.1%, to $89.28 by 1809 GMT. US West Texas Intermediate (WTI) crude was up $1.80, or 2.3%, at $81.84.

“The market started on a positive note, as Saudi energy minister denied a production increase was under discussion. That supported prices,” said Phil Flynn, an analyst at Price Futures group.

The United Arab Emirates, another big OPEC producer, denied it was holding talks on changing the latest OPEC+ agreement, while Kuwait said there were no such talks. Algeria said an “improbable” revision of the OPEC+ agreement was not discussed.

OPEC, Russia and other allies, known as OPEC+, meet on December 4, a day before the start of European and G7 measures in response to Russia’s invasion of Ukraine, which could support the market. On December 5, a European Union ban on Russian crude imports is set to start, as is a G7 plan that will allow shipping services’ providers to help to export Russian oil, but only at enforced low prices.

 

Published in The Express Tribune, November 23^rd, 2022.

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