Oil Futures Settle Higher On Inventory Data, OPEC+ Output Cut Decision
Crude oil prices climbed higher on Wednesday after the Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, agreed to impose deep output cuts, aiming to spur a recovery in oil prices.
Data showing a drop in U.S. crude inventories in the week ended September 30 contributed as well to the surge in oil prices.
OPEC+ today decided to reduce production by 2 million barrels per day from November. Analysts had expected the group to impose output cuts of somewhere between 500,000 barrels and 2 million barrels.
West Texas Intermediate Crude oil futures for November ended higher by $1.24 or about 1.4% at $87.76 a barrel.
Brent crude futures were up $1.61 or about 1.74% at $93.41 a barrel a little while ago.
Saudi Arabia, the de-facto leader of OPEC, said the cut of 2 million barrels per day of output, which is 2% of global supply, was necessary to respond to rising interest rates in the West and a weaker global economy.
Meanwhile, the White House said President Joe Biden would continue to assess whether to release further strategic oil stocks to lower prices.
Data from U.S. Energy Information Administration (EIA) showed crude oil inventories in the U.S. dropped by 1.356 million barrels last week, as against expectations for an increase of 2.052 million barrels.
Gasoline stockpiles fell 4.728 million barrels last week, against expectations for a draw of 1.334 million barrels, while distillate stocks dropped by 3.443 million barrels, more than three times the expected fall.
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