NEW DELHI: Oil prices increased on Thursday after OPEC+ countries decided to slash crude production by nearly 2 million barrels a day, the largest reduction since 2020. The Brent Crude Future, the benchmark of crude price, was trading at $94.00 per barrel, up 0.67% (IST 8.19 PM) and the US West Texas Intermediate (WTI) crude futures was trading at $88.29 per barrel, up 0.60%.
The Organization of Petroleum Exporting Countries (OPEC) and allies including Russia announced the production cut following its first meeting in person since March 2020. According to the reports, the reduction is equivalent to nearly 2% of global oil demand.
They will cut production from November and OPEC and its allies will meet again in December. The group said the decision to cut production was made in light of the uncertainty that surrounds the global economic and oil market outlooks.
Oil prices in the international market inflated in the first half of the year, owing to the Ukraine and Russia war. The global benchmark had hit a peak of $139 a barrel in March. However, crude prices came down sharply on fears that a global recession will depress demand.
Brent crude is down 20% since the end of June. OPEC and its allies, which control more than 40% of global oil production, are hoping to pre-empt a drop in demand for their crude from a sharp economic slowdown in China, the US and Europe.