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
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
“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
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