Oil prices pared losses on Friday after OPEC and allies, together known as OPEC+, agreed to stick to a gradual increase of global crude oil supply despite calls from the U.S to pump more oil. The group agreed to stick to their plan of raising oil production by 400,000 barrels per day from December.
Brent crude oil gained $1.73, or 2.2 percent to $82.61 a barrel as at 6:29 pm Nigerian, while the US West Texas Intermediate crude (WTI) appreciated by $2.08 or 2.6 percent to $80.40 per barrel.
OPEC+ has refused all calls to up production enough to match global demand following the devastating effect of COVID-19 on the world economy.
In the U.S, retail gasoline prices are averaging around $3.50 a gallon, forcing U.S President Joe Biden to urge energy producers in G20 with spare capacity to increase production.
“Markets know that release of strategic reserves can only have a temporary bearish effect on prompt prices and is not a lasting solution for an imbalance between supply and demand,” Rystad Energy’s head of oil markets Bjornar Tonhaugen said in a note.
“Luckily for consumers, the current deficit in the total oil market, which looks set to persist through December, will not last for long,” Tonhaugen added.
Oil prices rose to a seven-year high last week but dropped after data showed an increase in U.S. crude oil inventories and signs that high prices could encourage higher production elsewhere.