OPEC+ Agrees to Cut Production — Here’s What You Want to Know

Good morning, readers. Hallam Bullock reporting from London 

The White House was pleased with the move. To avoid being eliminated, it was down to the wire. Europe is in the grip of an icy winter Energy crisisOPEC+ made the decision to stabilize economic stability after grappling with inflation and trying to prevent it from getting worse. Production of oil is being slashedThis could have huge implications for the global economy. 

Let’s get it down.

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1. OPEC+ reached an agreement to lower production. According to the White House in a statement, the move would be “total catastrophe”. Last-ditch attempt to dissuade OPEC+It could also be considered a hostile act. 

But the group — which includes Saudi Arabia, the United Arab Emirates, and Russia — agreed Wednesday to slash daily oil production by 2 million barrels, in a bid to send crude prices higher.

The decision appears to have been successful in the immediate aftermath. West Texas Intermediate crude oil rose 1.3% to $87.65 a barrel, while Brent crude crude, an international benchmark, rose 1.6% at $93.28

This could lead to higher gasoline prices in the US.Only weeks before the midterm election, During this time, Russian President Vladimir Putin was accused of weaponizing energyHe will continue to make revenue from countries that oppose his invasion of Ukraine. 

The White House was not impressed. US President Joe Biden reportedly stated that he was disappointed by the move, and called OPEC+ “disappointed”.shortsighted.” 

The US is concerned about the political and economic consequences of this decision. Karin Jean-Pierre, White House spokesperson, said that “It’s obvious that Opec+ will align with Russia with today’s announcement.” This alliance would make it difficult for western governments to block Russia’s war plans in Ukraine. It also marks a significant turning point in Saudi Arabia’s 75-year-old relationship with America in energy. Financial Times Reports. 

OPEC+ defended the decision, saying that it was due to “uncertainty” surrounding global economic and oil market outlooks. The Saudi energy minister said:Pre-emptive rather than reactive is better than being sorryThe New York Times reports.

The EU is closer to approbating a proposal ahead of the meeting Russian oil prices to be capped. Although the 27-country bloc has agreed to start drafting legislation for the price limit, formal approval will not be granted until the G7 has fully figured out how it will work. The US Treasury Department feared that the program would be ineffective. Tens of billions in annual revenueMoscow

Russia has however warned that any price cap could backfire. The country’s deputy prime minister, Alexander Novak, said the EU’s plan could lead to Russia temporarily cutting oil production further — a move that would see crude prices rise, and gasoline follow. 

The Wall Street Journal reports that the Biden administration also looks at Reduce Venezuelan sanctionsOPEC+’s supply cuts have made it possible for Chevron to pump oil again to fill the gap. It is still in discussion but could allow US and European markets access to oil from Venezuela. Venezuela was once a major oil producing country, pumping more than 3 million barrels per hour during the 1990s. 

You can read the entire story. 

What will the impact of the decision? Let me know hbullock@insider.comTweet @hallam_bullock

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10.  Oil prices have extended a winning streak following OPEC+’s decision. The US Energy Information Administration report that showed crude oil stockpiles falling by 1.4 billion barrels per week also helped oil gain strength. Expectations for an increase in inventory are not as high as they seem.

You can keep up to date with all the market news throughout the day by visiting www.markets.com Insider’s RefreshThe Insider newsroom has a dynamic audio news bulletin called. Listen here.

Hallam Bullock, London. (Feedback or tips Email hbullock@insider.com or tweet @hallam_bullock).

Max Adams edited the text@maxradams) in New York.