Oil prices climb after Opec+ agrees on 2 million bpd output cut

Oil prices climbed after the Opec+ alliance agreed to reduce output by 2 million barrels per day, its biggest production cut since the start of the coronavirus pandemic in 2020, as it vies to boost the energy market amid a global economic slowdown that is weighing on fuel demand.

Brent, the benchmark for two thirds of the world’s oil, was up 0.19 per cent at $93.55 a barrel at 8.52am UAE time on Thursday. West Texas Intermediate, the gauge that tracks US crude, was trading 0.18 per cent higher at $87.92 a barrel.

After registering their worst quarter in two years last month, oil prices gained more than 10 per cent over the past week in the run-up to the first in-person meeting of the 23-member supergroup of crude producers in Vienna since March 2020.

The rally was largely driven by media reports that signalled a large production cut was on the table.

The US Energy Information Administration weekly report, which was released on Wednesday, also fed into the rally as it showed that American crude stocks fell by 1.4 million barrels in the week ended September 30.

Opec+ said at the meeting that its decision was made in “light of the uncertainty that surrounds the global economic and oil market outlooks, and the need to enhance the long-term guidance for the oil market, and in line with the successful approach of being proactive and pre-emptive”.

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