Saturday, November 26

Oil rises near seven-year high as OPEC+ sticks to output plan


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LONDON — Oil prices jumped on Wednesday,

heading near a previous seven-year high, after OPEC+ decided to

stick to its planned output increase despite pressure from top

consumers to raise production more quickly.

A source told Reuters that OPEC+ agreed to increase oil

production by 400,000 bpd from March after a short meeting.

Brent crude was up $1.16 cents, or 1.3%, at $90.32 a

barrel by 1303 GMT.

US West Texas Intermediate crude rose $1.28 to

$89.48 a barrel.

Tight oil supplies and geopolitical tensions in Eastern

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Europe and the Middle East have boosted oil prices by about 15%

this year. On Friday crude benchmarks hit their highest since

October 2014, with Brent touching $91.70 and US crude hitting

$88.84.

“Bearish EIA statistics this afternoon might be used as an

excuse for profit-taking. Unless the weather warms and Ukraine

tensions are settled, oil should remain supported,” said PVM Oil

Associates analyst Tamas Varga, adding that cold weather in the

United States should also support prices.

A major winter storm is expected to wallop much of the

central United States and stretch to parts of the Northeast this

week, bringing heavy snow, freezing rain, and ice, the National

Weather Service said on Monday. The storm comes days after a

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deadly winter blast.

US crude stocks fell by 1.6 million barrels for the week

ended Jan. 28, against analysts’ estimate of an increase of 1.5

million barrels, according to market sources citing American

Petroleum Institute figures on Tuesday.

But gasoline inventories rose by 5.8 million barrels, above

analysts’ expectations for a 1.6 million barrel build. The

Energy Information Administration, the statistical arm of the

US Department of Energy, is due to release fresh weekly data

later on Wednesday.

Tensions between Russia and the West also underpinned crude

prices. Russia, the world’s second-largest oil producer, and the

West have been at loggerheads over Ukraine, fanning fears that

energy supplies to Europe could be disrupted.

On Tuesday, Russian President Vladimir Putin accused the

West of deliberately creating a scenario designed to lure it

into war and ignoring Russia’s security concerns over Ukraine.

(Reporting by Yuka Obayashi and Julia Payne

Editing by David Evans and David Goodman

)



financialpost.com