After the OPEC alliance agreed to the biggest production cut since 2020, oil went up for a fourth session, and Russia reiterated a warning that it won't sell crude to countries that adopt a price cap.
The West Texas Intermediate futures traded near $88 a barrel after jumping 10% over the previous three sessions. OPEC said it would reduce output by 2 million barrels a day from November, a move that drew a swift rebuke from the US. The Biden administration has been trying to get more supply from producers as it battles energy-driven inflation.
See also: Saudi Arabia Enrages Biden and Aids Putin With Oil Output Cut
After the OPEC action, Goldman Sachs Group Inc. raised its fourth quarter price forecast for Brent crude to $110 a barrel and said the reduction could prompt the International Energy Agency to coordinate a release of oil reserves. The US benchmark fell 25% in the previous quarter, with the cut halting a long slide in crude prices.
Saudi Arabia's energy minister said the real-world impacts of the cuts will likely be between 1 million and 1.1 million barrels a day, as some alliance members are already well below their quotas. That is the biggest reduction since the start of the epidemic.
After the OPEC announcement, Russian Deputy Prime Minister Alexander Novak said moves to cap the price of his country's oil will backfire and could lead to a temporary reduction in output. The European Union has approved a new package of sanctions on Moscow that includes the US-led measure to put a price limit on Russian oil.
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