OPEC+ is jolting oil markets this week with plans to cut output — and the ripples could reach all the way to the U.S. midterm elections.
Driving the news: The coalition of OPEC, Russia and allied producers on Wednesday announced cuts of 2 million barrels per day in Vienna starting in November 2022.
- It’s looking to prop up prices that have fallen greatly since early June when Brent crude was above $120 per barrel — and has already succeeded despite bearish economic signs.
- Word of the cuts in the tight global market sent oil prices back upward this week, with Brent crude rising several dollars to roughly $93 Wednesday morning.
Why it matters: The crude revival — if it persists — will put fresh upward pressure on U.S. gasoline prices, which have already inched back up lately after months of big declines.
- The ongoing Saudi-Russian cooperation despite Vladimir Putin’s invasion of Ukraine is also the latest sign of Riyadh’s strained relations with the White House.
Threat level: U.S. officials “are reportedly working around the clock to stave off a big cut, appealing to countries that it maintains strong defense and strategic ties,” RBC Capital Markets said in a note. (CNN has more.)
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Article URL : https://www.axios.com/2022/10/05/opec-cutting-oil-output-rising-gas-prices