Oil prices to shoot after OPEC cuts production by 2 million barrels per day
Oil prices to shoot after OPEC + alliance of oil-exporting countries cuts production by 2 million barrels per day to support sagging prices.
The oil-exporting nations in the OPEC+ alliance voted on Wednesday to drastically reduce output in an effort to sustain falling oil prices, a decision that might further harm the fragile global economy and increase politically sensitive pump costs.
After meeting for the first time in person since the beginning of the COVID-19 crisis at the OPEC oil cartel’s headquarters in Vienna in November, energy ministers reduced production by a larger-than-expected 2 million barrels per day.
The decision, according to the group, was made in light of “the uncertainty that surrounds the world economy and outlooks for the oil market.
The decision, according to the group, was made in light of “the uncertainty that surrounds the world economy and outlooks for the oil market.
Abdulaziz bin Salman, the Saudi Arabian Minister of Energy, emphasized the group’s claimed aim as a defender of stable energy markets.
“We are here to stay as a moderating force, to bring about stability,” he told reporters.
Oil is trading well below its summer peaks because of fears that major global economies such as the U.S. or Europe will sink into recession due to high inflation, rising interest rates, and energy uncertainty over Russia’s war in Ukraine.
The OPEC+ decision could help member Russia weather a looming European ban on most of Moscow’s oil, but its impact will have some limitations because countries in the alliance already can’t meet their quotas.
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However, U.S. President Joe Biden considered the OPEC+ decision “short-sighted while the global economy is dealing with the continued negative impact of (Russian President Vladimir) Putin’s invasion of Ukraine,” White House press secretary Karine Jean-Pierre told reporters aboard Air Force One.
“It’s clear that OPEC+ is aligning with Russia with today’s announcement,” she said.
Bin Salman rejected questions referencing the reaction in Washington or implying that OPEC was assisting Russia, saying the discussion was in a nonpolitical “silo” where the focus was prudent management of oil markets.
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