Oil prices have reportedly risen in early trade on the backdrop of the Organisation of the Petroleum Exporting Countries and allies (OPEC+) nations sticking to their oil output targets. As of Sunday, OPEC+ decided to stick to its October plan of oil output cuts.
According to a Reuters report, apart from the updates from OPEC+, the prices have also inched up ahead of a European Union ban and price caps on Russian crude. Since these limitations are expected to come into effect from today, a movement in oil prices has been witnessed.
The report adds, “Brent crude futures climbed 39 cents, or 0.5 per cent to $85.96 a barrel at 2309 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 37 cents, or 0.5 per cent, to $80.35 a barrel.”
The decision taken by OPEC+ on oil output targets was expected by many experts. Since the world economy is reportedly headed towards an economic downturn, many analysts were waiting to see the impact of the EU import ban G7 cap on seaborne Russian oil. The G7 had put a $60-a-barrel price cap on the latter alongside Russia’s threats of cutting supply if anyone decided to abide by the same.
Before this slight rise, Oil was trading low on fears of a global economic downturn, recession, China’s strict zero-COVID restrictions and other reasons. Analysts also feared that the latter’s strict curbs may reduce demand for fuel causing a larger impact.
Such uncertainty due to a myriad of factors was also a reason that OPEC+ decided to slash oil production by 2 million barrels per day, starting in November.