Oil prices increased by roughly 2% on Friday and are expected to rise for the second week in a row thanks to OPEC+’s plan to reduce supply by the most since 2020 despite worries about a recession and high interest rates.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, decided to limit production in advance of the European Union’s ban on Russian oil. This will decrease supply in a market where there is already a shortage of oil.
Brent crude increased $1.70, or 1.8%, to $96.12 a barrel by 1348 GMT.
Additionally, US West Texas Intermediate crude increased $1. 72, or 1.9%, to $90.17 per barrel.
The expected return to the $100 oil price will be one of the key effects of the current OPEC cuts, but the gains will be constrained due to the deteriorating economic conditions, according to Stephen Brennock of BVM oil brokerage.
After reports showed that the US economy is adding jobs at a robust rate, which reinforced expectations that the Federal Reserve (the US central bank) will continue to sharply tighten monetary policy, the price of oil continued to rise despite the dollar’s rise.
A rising dollar typically has an impact on oil and other risky assets, making oil more expensive for holders of other currencies.
Oil is climbing and will have weekly gains.
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