Oil rises after OPEC+ call for US to increase production

Brent crude rose 36 cents, or 0.45%, to $80.90 a barrel after touching $81.79 by 0912 GMT. US West Texas Intermediate crude rose 60 cents, or 0.76%, to $79.41, following a high of $80.17.

Major OPEC+ producers agreed to stick to their plan to increase oil output by 400,000 barrels per day (bpd) from December, with US President Joe Biden calling for additional production to calm rising prices. was ignored.

OPEC’s top producer Saudi Arabia has rejected calls for rapid growth from the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, collectively known as OPEC+, citing economic constraints. done.

The group is restricting supply after demand evaporated due to the COVID-19 pandemic.

But US retail gasoline prices are not far from $4 a gallon, considered a pressure point for US drivers, after Biden urged major G20 energy producers with excess capacity to boost production on Saturday. is on the house.

The White House said Washington would consider a full range of tools at its disposal to guarantee access to affordable energy after the OPEC+ meeting.

UBS oil analyst Giovanni Stanovo said in a note that the focus will now be on whether the United States and other countries choose to release oil from strategic petroleum reserves (SPRs).

“While such a decision would drive prices down, SPR can only fill the gap during temporary production disruptions and cannot fix the structural issues of low investment and rising demand,” Stonovo said. The bank expects Brent crude to continue to climb up to $90 a barrel in the coming months.

Oil prices recently hit a seven-year high, but fell this week after a rise in US inventories and signs that higher prices could encourage higher production elsewhere.

Brent is on track for a weekly decline of nearly 4%, the second straight week the contract has fallen. US oil is headed for a fall of about 5 percent this week.