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Oil rises after OPEC+ cut and despite economic weakening

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The oil price has skyrocketed this Friday backed by the decision of the OPEC+ to cut its daily production in two million barrels and despite the economic concerns generated around a possible recession.

The barrel Brent, reference in Europe, has risen 3.7%, to 97.92 dollars, while the west texasa reference in the United States, has increased by 4.75%, to 92.65 dollars.

In this way, the Brent has recorded a weekly advance of around 10%, while that of West Texas has been 15%, which has led both to register their fifth consecutive daily gain and the second weekly.

The cut of the Organization of Petroleum Exporting Countries and its allies (OPEC +), the largest carried out for two years, occurs before the European Union embargo on Russian oilwhich will «tighten» supply in an already tight market.

The decision of OPEC and its allies seeks to try reduce declines in crude oil priceswhich have fallen sharply in recent months.

«Among the key ramifications of OPEC’s latest cut is a likely $100 oil return«, Stephen Brennock, of the PVM oil broker, pointed out in statements collected by ‘Reuters’. «The gains, however, will be limited by the growing economic headwinds.»

«With Brent now firmly back in the $90-$100 range, OPEC will probably be satisfied with the outcomealthough there remains substantial uncertainty about the economic outlook,» said Craig Erlam of OANDA brokerage.

The rally in oil prices has occurred even as the dollar continues to show its strength after the employment report published this Friday in the United States was stronger than expected by the market. This fact gives coverage to the Federal Reserve (Fed) to continue with its monetary tightening.

The dollar strength it makes oil more expensive for other currency holders and tends to weigh on oil and other risky assets.

The president of United States, Joe Bidenexpressed his disappointment this Thursday with OPEC+’s plans and stated that the United States is looking for all possible alternatives to prevent prices from rising.

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