Following the “OPEC Plus” group’s agreement on additional production cuts to lower oil production by around two million barrels per day, oil prices increased in early trade on Thursday.
The “OPEC Plus” pact, which brings together independent producers like Russia and the Organization of the Petroleum Exporting Countries (OPEC), would put pressure on supplies in a market that already has a limited supply.
By 00. 27 GMT, Brent crude futures were down 46 cents, or 0. 5%, at $93. 83 per barrel.
The price of West Texas Intermediate crude futures decreased by 45 cents, or 0.5%, to $88.21 a barrel.
Saudi Arabia claimed that the production reductions, which account for around 2% of the world’s supply, were necessary due to the weakening of the global economy and rising borrowing rates in the West.
The pact was denounced by US President Joe Biden’s administration as being “short-sighted.”
The White House made a clear allusion to legislation that may subject OPEC+ members to antitrust lawsuits when it stated that it will consult Congress on new ways to weaken the group’s grip over energy pricing.
Separately, Alexander Novak, the deputy prime minister of Russia, suggested on Wednesday that Russia may lower oil production in an effort to counter the effects of the West capping Russian energy prices as a result of Russia’s invasion of Ukraine.
According to the US Energy Information Administration, the week-over-week drop in US oil stockpiles helped to sustain prices.
In the week ending September 30, inventories decreased by 1. 4 million barrels to 429. 2 million barrels.
Oil increases following the “OPEC +” production-cutting deal.
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