Oil prices rise after OPEC cuts

Oil prices went up on Friday after OPEC agreed to tighten global supply with a deal to reduce production targets by 2 million barrels per day bpd, which is its largest reduction since 2020 and comes ahead of a European Union embargo on Russian oil. The decision would add to inflation, as supplies would be squeezed in an already tight market.

By GMT, the price of crude oil rose 19 cents to $94.61 a barrel. After hitting $89.37 per barrel earlier in the day, the highest since Sept. 14, WTI crude futures rose 24 cents to $88.69 a barrel.

U.S. President Joe Biden expressed disappointment on Thursday over OPEC plans, and he and officials said the United States was looking at all possible alternatives to keep prices from rising. Some options include the possibility of releasing more oil from the Strategic Petroleum Reserve or exploring a curb on energy exports by U.S. companies.

The U.S. bank expects OPEC s output cut to be very bullish for prices going forward, and Goldman Sachs has raised its oil price forecast for this year and 2023. It increased its 2022 Brent price forecast to $104 per barrel from $99 per barrel and 2023 forecast to $110 per barrel from $108 per barrel.