Oil is heading for weekly gains after the OPEC + decision to cut production

Oil prices rose on Friday and headed for gains for the second week in a row, supported by the decision of OPEC + to make the largest supply cut since 2020, despite concerns about a recession and higher interest rates.

The cut decided by the OPEC + cartel, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, comes before the European Union bans Russian oil and will reduce supplies in a market already suffering from tight supply.

By 0800 GMT, Brent crude rose 33 cents, or 0.4 percent, to $94.75 a barrel. US West Texas Intermediate crude also rose 33 cents, or 0.4 percent, to $88.78 a barrel.

The two benchmarks are heading to record gains for the second week, and Brent crude is close to recording an eight percent rise this week. But it is still significantly lower after approaching an all-time high of $147 a barrel hit in March after Russia’s invasion of Ukraine.

The dollar’s rise added to pressure on oil prices, amid statements from Federal Reserve officials indicating that the bank will continue to tighten monetary policy sharply.

A stronger dollar makes oil more expensive for holders of other currencies, and affects oil and other risky assets.

Markets are awaiting the US non-farm payrolls report due later on Friday.

On Thursday, US President Joe Biden expressed his disappointment with the OPEC+ plans. He and other officials said the United States was studying all possible alternatives to prevent price hikes.