Oil leaps 4% to its highest level in 5 weeks after the OPEC + decision

Oil prices jumped about four percent on Friday, at a five-week high, supported by OPEC + ‘s decision to make the largest supply cut since 2020, despite recession concerns and high rates of interest.

Oil rose for a fifth consecutive day despite the dollar’s rise, after data showed that the US economy is creating jobs at a sustained pace, while reinforcing expectations that the Federal Reserve will continue to tighten. monetary policy.

A stronger dollar makes oil more expensive for holders of other currencies and usually affects oil and other risky assets.

Brent crude futures rose $ 3.50, or 3.7 percent, to $ 97.92 a barrel. US West Texas Intermediate Crude Oil also rose $ 4.19, or 4.7 percent, to $ 92.64 a barrel.

This was the highest closing level for Brent since August 30 and for US crude since August 29. The two contracts posted gains for the second consecutive week and the largest percentage gain since March of this week. Brent oil rose by around 11% during the week and US crude by 17%.

“One of the main implications of the recent OPEC cuts is the likely return to the $ 100 oil price,” said Stephen Brennock of BVM oil brokerage.

The cut decided by the OPEC + bloc, of which the Organization of Petroleum Exporting Countries (OPEC) is a member, precedes the European Union’s ban on Russian oil, which will reduce supplies in a market already plagued by scarce supply.

On Thursday, US President Joe Biden expressed his disappointment with OPEC + plans. He and other officials said the United States was studying all possible alternatives to prevent price hikes.