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The
cut from the Organization of Petroleum Exporting Countries and
allies including Russia, known as OPEC+, comes ahead of a
European Union embargo on Russian oil and will squeeze supply in
an already tight market.
Brent crude was up 33 cents, or 0.4%, to $94.75 a barrel at 0800
GMT. U.S. West Texas Intermediate or WTI crude also gained 33
cents, or 0.4%, to $88.78.
"Among the key ramifications of OPEC's latest cut is a likely
return of $100 oil," said Stephen Brennock of oil broker PVM.
"Gains, however, will be capped by mounting economic headwinds."
Both benchmarks were heading for a second weekly gain, with that
of Brent approaching 8% this week. The global benchmark is still
down sharply after coming close to its all-time high of $147 a
barrel in March after Russia invaded Ukraine.
"With Brent now firmly back in the $90-100 range, the group will
likely be pleased with the outcome although substantial
uncertainty remains over the economic outlook," said Craig Erlam
of brokerage OANDA, referring to OPEC+.
A stronger U.S. dollar ahead of Friday's U.S. jobs report, and
comments from Federal Reserve policymakers signaling further
aggressive policy tightening limited the rally.
Dollar strength makes oil more expensive for other currency
holders and tends to weigh on oil and other risk assets. [USD/]
Investors are looking to the U.S. nonfarm payrolls report due
later on Friday for clues on how much further U.S. rates need to
rise. [MKTS/GLOB]
U.S. President Joe Biden expressed disappointment on Thursday
over OPEC+'s plans and he and officials said the United States
was looking at all possible alternatives to keep prices from
rising.
(Additional reporting by Mohi Narayan; editing by Jason Neely)
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