London, Oct 7 (BNA): Oil rose by about 1% on Friday and is heading for a second consecutive weekly gain backed by the decision of OPEC + to make the largest supply cut since 2020 despite concerns about a recession and higher interest rates.
Reuters reported that the cut from the Organization of the Petroleum Exporting Countries and allies including Russia, in what is known as OPEC+, comes before the European Union’s ban on Russian oil and will reduce supplies in an already tight market.
Brent crude rose 87 cents, or 0.9 percent, to $95.29 a barrel at 1110 GMT. US West Texas Intermediate, or WTI, rose 98 cents, or 1.1%, to $89.43.
“Among the main implications of the recent OPEC cuts is the potential return of $100 of oil,” said Stephen Brennock of BVM oil brokerage. “The gains, however, will culminate in growing economic headwinds.”
Both benchmarks are heading for a second weekly gain, with Brent over 8% this week. The global benchmark crude is still sharply lower after approaching an all-time high of $147 a barrel in March after Russia’s invasion of Ukraine.
“With Brent crude back firmly in the $90-100 range, the group is likely to be pleased with the outcome despite continued significant uncertainty over the economic outlook,” said Craig Erlam of brokerage Oanda, referring to OPEC+, referring to OPEC+.
A drop in the US dollar ahead of Friday’s US jobs report also provided some support for oil, although despite the Federal Reserve’s commitment to fighting inflation, strategists believe any weakness will not continue.
A stronger dollar makes oil more expensive for other currency holders and tends to affect oil and other risky assets.
Investors are looking forward to the US non-farm payrolls report due later on Friday for clues about the need for higher US interest rates.
US President Joe Biden expressed disappointment on Thursday about the plans of OPEC+ and he and officials said the United States was considering all possible alternatives to prevent prices from rising.
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