Oil prices rose on Friday due to tight supply fears following OPEC+ output cuts and less supply from Russia, OPEC+’s second-largest producing country, as well as price support from a stronger US dollar.
International benchmark Brent crude traded at $86.19 per barrel at 10.04 a.m. local time (0704 GMT), a 0.11% increase from the closing price of $86.09 a barrel in the previous trading session.
At the same time, American benchmark West Texas Intermediate (WTI) traded at $82.34 per barrel, a 0.22% rise after the previous session closed at $82.16 a barrel.
Investors are assessing the supply risks triggered by the OPEC+ decision to cut production beginning in May.
The group’s supply cuts were said to include reductions by Russia of 500,000 barrels per day (bpd), which were similarly extended until the end of the year.
However, Russia later announced its intention to reduce crude oil production by 700,000 barrels per day, raising concerns over tight supply and prompting higher prices.
The OPEC group’s monthly oil market report released Thursday revealed that the group’s forecast of global oil demand growth remains unchanged for 2023.
According to the report, oil demand will increase by 2.32 million barrels per day (bpd) in 2023 to reach 101.9 million bpd.
The falling value of the greenback also supported dollar-indexed oil prices.
The US dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, declined 0.16% to 100.54 early Friday.
