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Oil prices rise as OPEC moves to increase output

Oil prices rose Thursday even as major crude producers agreed to boost output by more than the usual amount following an EU ban on Russian…

Oil prices rose Thursday even as major crude producers agreed to boost output by more than the usual amount following an EU ban on Russian imports.

European shares rose in mid-afternoon trading, with Frankfurt edging 0.6 per cent higher and Paris up by more than one per cent. London’s FTSE 100 was shut for a holiday.

Wall Street stocks were little changed early Thursday following mixed labour data and a Microsoft earnings warning.

All eyes were on Vienna where the OPEC+ group of major oil producers, led by Saudi Arabia and Russia, agreed to boost oil output more than expected in light of the Russian invasion of Ukraine.

Producers had been expected to stick to their policy of only increasing output modestly, as they have done since May 2021.

But, amid soaring prices and hard on the heels of the EU ban on most Russian oil imports, pressure has been rising for the 23-member cartel to boost output to stabilise prices.

In the end, the group agreed to add 648,000 barrels per day to the market in July, up from 432,000 in previous months.

The move did not appear to be enough to calm oil markets, with the benchmark Brent crude up 0.4 per cent at $116.79 per barrel and West Texas Intermediate also 0.5 per cent higher at $115.80.

Soaring energy prices have fuelled growing inflation around the world, hampering economic growth and prompting central banks to hike rates.

Earlier in the day, oil prices had fallen more than two per cent after a Financial Times (FT) report said that Saudi Arabia was considering a plan to boost output as Russia struggles to meet targets owing to Ukraine war-linked sanctions.

The FT report followed a Wall Street Journal article saying OPEC was considering removing Russia from an agreement that has locked producers into limited output increases, which analysts said could lead to an early end of the pact and allow nations to open the taps more.

Concerns about tighter Russian supplies have sent crude soaring this year, just as demand picks up owing to the reopening of economies but Riyadh has ignored previous calls to pump more.

“One can expect trading activity involving oil to remain volatile,” Patrick J. O’Hare of Briefing.com said.

Key figures at around 1345 GMT
Frankfurt – DAX: UP 0.6 per cent at 14,428.94

Paris – CAC 40: UP 1.1 per cent at 6,486.85

EURO STOXX 50: UP 0.7 per cent at 3,787.26

London – FTSE 100: Closed for a holiday

New York – Dow: DOWN 0.2 per cent at 32,746.36

Tokyo – Nikkei 225: DOWN 0.2 per cent at 21,413.88 (close)

Hong Kong – Hang Seng Index: DOWN 1.0 percent at 21,082.13 (close)

Shanghai – Composite: UP 0.4 per cent at 3,195.46 (close)

Euro/dollar: UP at $1.0703 from $1.0658 on Wednesday

Pound/dollar: UP at $1.2536 from $1.2492

Euro/pound: UP at 85.36 pence from 85.25 pence

Dollar/yen: DOWN at 129.78 yen from 130.15 yen

Brent North Sea crude: UP 0.4 per cent at $116.79 per barrel

West Texas Intermediate: UP 0.5 per cent at $115.80 per barrel (AFP)

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