OPEC+ Decided Not to Change Its Position

Oil prices strengthened their positions on Wednesday, heading near a previous seven-year high after OPEC+ decided to stick to its planned output increase despite pressure from major consumers to raise production more quickly.

OPEC and its allies, together known as OPEC+, agreed to increase oil production by 400,000 bpd from March according to a source.

Brent crude gained $1.16 or 1.3% to $90.32 a barrel by 13:03 GMT.

U.S. West Texas Intermediate (WTI) crude added $1.28 to $89.48 a barrel.

Geopolitical tensions and tight oil supplies boosted oil prices by about 15% this year. Several days ago, more precisely on Friday, crude benchmarks reached their highest since October 2014, with Brent touching $91.70 and U.S. crude hitting $88.84.

OPEC+ and other factors

Apart from OPEC+, there are other important issues as well. This week, a major storm is expected to batter much of the central United States and stretch parts of the Northeast, according to the National Weather Service. More importantly, the storm comes days after a deadly winter blast.

U.S. crude stocks declined by 1.6 million barrels for the week that ended on January 28. Analysts expected U.S. crude stocks to increase by 1.5 million barrels. 

Nevertheless, gasoline inventories rose by 5.8 million barrels, above analysts’ expectations for a 1.6 million barrel build. The Energy Information Administration (EIA) is due to release fresh weekly data later on Wednesday. 

Tensions between Russia and the West also affected crude prices. The situation in Europe is quite complicated. The Russian Federation is the world’s second-largest oil producer. Unsurprisingly, geopolitical risks have the potential to create numerous problems. This week, Russian President Vladimir Putin accused the West of deliberately creating a scenario designed to lure it into war and ignoring its security concerns over Ukraine.