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Oil prices to rise as two million fewer barrels to be produced each day | Business News



The Organization of the Petroleum Exporting Countries (Opec) and Russia agreed.

The move is an attempt to raise prices in countries that are feeling the heat from high energy costs.

Members Saudi Arabia and Russia led the group in production cuts, the steepest drop since the early days of the pandemic as demand fell and oil prices plummeted.

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The announcement was widely expected and oil prices have risen 5% since Friday. The benchmark of oil prices, Brent crude, rose to $91.95 (£81.69) following news of the production cuts.

Prices have fallen to around $90 (£79.93) a barrel, down from a high of $120 (£107) three months ago, amid fears a global recession will dent demand. bridge.

White House officials Joe Biden have lobbied Opec members to avoid production cuts that would boost oil prices ahead of the US midterm elections.

Analysis:
Oil production cuts are two big fingers for the US

Since Russia’s invasion of Ukraine, the Biden administration has called for keeping output high to ease energy security and ease price pressures.

The White House responded angrily by calling the decision “short-sighted” and a “mistake”. White House press secretary Karine Jean-Pierre added that it shows a clear decision by Opec to go against the US and the West.

“It is clear that OPEC+ is aligning with Russia with today’s announcement,” she said.

That trait was rebuked before it was implemented.

“The decision is technical, not political,” Energy Minister Suhail al-Mazroui told reporters ahead of the Opec meeting.

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“We’re not going to use it as a political organization,” he said, adding that concerns about a global recession would be one of the main themes. “

France has had oil supply problems but denies a shortage. On Wednesday, the country used strategic reserves to deal with supply problems at some gas stations and prioritized access to medical workers.

Iraq’s oil minister spoke on Wednesday and said his country’s oil exports would not be affected by Opec’s production cuts.

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