Oil Prices Climb As OPEC+ Cuts Output
Faizan Hashmi Published October 06, 2022 | 02:20 AM
New York, Oct 5 (UrduPoint / Pakistan Point News - 6th Oct, 2022 ) :Oil prices climbed Wednesday as OPEC and its Russia-led allies announced a major cut in output, while a stocks rally ran out of gas.
It is the biggest cut since the height of the Covid pandemic in 2020 and came despite concerns it could fuel inflation further and push central banks to hike interest rates even more.
Oil prices had slid in recent weeks back to the levels before the war in Ukraine on concerns of a global slowdown, but have surged in recent days on expectations of the production cut.
The main international crude contract, Brent, jumped two percent following the decision before finishing at $93.37 a barrel, up 1.7 percent.
"Oil futures are expected to continue their rally in the short and medium term, but continued concerns over a global recession and rising inflation are likely to limit the long-term upside," said Srijan Katyal of the international brokerage ADSS.
Swissquote analyst Ipek Ozkardeskaya warned that the big cut could "backfire" on OPEC+ if investors fear it will push inflation higher and force central banks to hike interest rates so much that it triggers a recession.
"The higher the energy prices, the sharper the central banks must kill demand to pull the prices lower," she said before the decision was announced.
"As Prime Minister Liz Truss took to the stage to try and shore up her support among her party and the country, the pound fell further back and government borrowing costs rose slightly," said market analyst Susannah Streeter at Hargreaves Lansdown brokerage.
"The speech will do little to quell dissent over worries that public services will bear the brunt of the tax cuts plans" she added.
- Key figures around 2030 GMT - Brent North Sea crude: UP 1.7 percent at $93.37 per barrel West Texas Intermediate: UP 1.4 percent at $87.76 per barrel New York - Dow: DOWN 0.1 percent at 30,273.87 (close) New York - S&P 500: DOWN 0.2 percent at 3,783.28 (close) New York - Nasdaq: DOWN 0.3 percent at 11,148.64 (close) London - FTSE 100: DOWN 0.5 percent at 7,051.60 (close) Frankfurt - DAX: DOWN 1.2 percent at 12,516.22 (close) Paris - CAC 40: DOWN 0.9 percent at 5,985.46 (close) EURO STOXX 50: DOWN 1.1 percent at 3,447.72 (close) Tokyo - Nikkei 225: UP 0.5 percent at 27,120.53 (close) Hong Kong - Hang Seng Index: UP 5.9 percent at 18,087.97 (close) Shanghai - Composite: Closed for a holiday Pound/dollar: DOWN at $1.1326 from $1.1476 on Tuesday Euro/dollar: DOWN at $0.9889 from $0.9986Euro/pound: UP at 87.29 pence from 87.01 penceDollar/yen: UP at 144.59 Yen from 144.13 yen