Oil jumps 4% to 5-week high lifted by OPEC+ output cut

NEW YORK, Oct 7 (Reuters) – Oil prices jumped about 4% to a five-week high on Friday, lifted again by an OPEC+ decision this week to make its largest supply cut since 2020 despite concern about a possible recession and rising interest rates.

Oil rallied for the fifth day in a row even as the dollar moved higher after data showing the US economy was creating jobs at a strong pace gave the Federal Reserve a reason to continue hefty interest rate hikes.

A strong greenback can pressure oil demand, making dollar-denominated crude more expensive for other currency holders.

Brent futures rose USD 3.50, or 3.7%, to settle at USD 97.92 a barrel, while US West Texas Intermediate (WTI) crude rose USD 4.19, or 4.7%, to end at USD 92.64.

That was the highest close for Brent since Aug. 30 and WTI since Aug. 29. The price jump pushed both benchmarks into technically overbought territory for the first time since August for Brent and June for WTI.

Both contracts posted their second straight weekly gains, and their biggest weekly percentage gains since March this week, with Brent was up about 11% and WTI 17% higher.

US heating oil futures jumped 19% this week to their highest close since June, boosting the heating oil crack spread – a measure of refining profit margins – to its highest close on record, according to Refinitiv data going back to December 2009.

The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, agreed this week to lower their output target by 2 million barrels per day.

“Among the key ramifications of OPEC’s latest cut is a likely return of USD 100 oil,” said Stephen Brennock of oil broker PVM.

UBS Global Wealth Management also projected Brent would “move above the USD 100 bbl mark over the coming quarters.”

The OPEC+ cut comes ahead of a European Union embargo on Russian oil and will squeeze supply in an already tight market.

OPEC Secretary General Haitham al-Ghais said the output target cuts will leave OPEC+ with more supply to tap in the event of any crises.

On Thursday, US President Joe Biden expressed disappointment over the OPEC+ plans. He and US officials said Washington was looking at all possible alternatives to keep prices from rising.

However, the US oil rig count, an early indicator of future production, fell by two this week to 602, according to energy services firm Baker Hughes Co BKR.O, as high inflation forces producers to spend more money to secure workers and equipment.

“Oil futures prices are managing to gain upside traction even though widespread inflation across the US and Europe is threatening the potential for a global recession where demand will likely take a sizeable hit,” analysts at energy consulting firm Gelber & Associates said.

In Europe, divisions between EU leaders over capping gas prices and national rescue packages resurfaced, with Poland accusing Germany of “selfishness” in its response to a winter energy crunch caused by Russia’s war in Ukraine.

(Additional reporting by Mohi Narayan in New Delhi and Alex Lawler in London; Editing by Marguerita Choy and David Gregorio)

US dollar posts steep gains as investors brace for non-farm payrolls

NEW YORK, Oct 6 (Reuters) – The dollar rose on Thursday, climbing for a second straight session, as investors bet on another strong US non-farm payrolls report that should keep the Federal Reserve on an aggressive tightening path for some time.

The dollar index, which measures the greenback against a basket of currencies, surged more than 1% to 112.22 and was up about 17% for the year so far.

“The dollar is on a roll again as stocks slump and recession fears hammer European currencies,” said Joe Manimbo, senior market analyst, at payments company Convera in Washington.

“The buck’s pop also reflects the market betting on another solid jobs report that reinforces the Fed’s hawkish rate path.”

US non-farm payrolls for September are due to be released on Friday, with economists forecasting a headline print of 250,000 new jobs, compared with 315,000 in August.

Chicago Fed President Charles Evans on Thursday said the Fed’s policy rate is likely headed to 4.5%-4.75% by the spring of 2023 as the Fed increases borrowing costs to bring down too-high inflation.

The euro was down 0.9% against the dollar at USD 0.9794, earlier falling after the release of European Central Bank minutes from last month’s meeting that showed policymakers were worried that inflation could get stuck at exceptionally high levels.

Separately, a source told Reuters on Thursday, citing provisional figures, that the German government expects Europe’s largest economy to slide into recession next year, contracting 0.4% as an energy crisis, rising prices and supply bottlenecks take their toll.

Sterling was down 1.5% versus the dollar at USD 1.1151. The euro also firmed against the pound, up 0.7% at 87.83 pence.

Against the yen, the dollar rose 0.3% to 145.05. It hit a session high of 145.135, not far from a 24-year peak of 145.90 yen touched on Sept. 22, which triggered a yen-buying intervention from Japanese authorities.

Against the Swiss franc, the dollar rose 0.8% to 0.9906 francs.

Currency markets have struggled to find a clear direction this week, following a dramatic third quarter. The dollar initially slid against most majors, before regaining ground.

“It’s the calm before the storm – the non-farm payrolls storm,” said Edward Moya, senior market analyst at OANDA in New York.

“Everyone knows the Fed has been consistent with their messaging. The Fed is not done bringing down inflation, and they are locked into this aggressive rate-hiking campaign that will only change once we start to see inflation come down.”

A major factor driving currency markets currently has been changing expectations of how aggressively central banks’ – particularly the Fed – will raise interest rates.

A key question is whether policymakers will pivot from primarily worrying about inflation to also considering slowing economic growth, and possibly leading to more cautious interest rate hikes.

US inflation data next week will be closely watched.

US benchmark Treasury yields whose recent gains had helped drive the greenback higher, were up about 6 basis points at 3.8175%.

The Australian dollar was down 1.12% against the greenback at USD 0.6412, still struggling after an unexpectedly modest 25 bp hike in Australia.

The US dollar was up 0.9% against the Canadian dollar at C$ 1.3743

(Reporting by Caroline Valetkevitch and Gertrude Chavez-Dreyfuss; Additional reporting by Alun John in London and Tom Westbrook in Singapore; Editing by Nick Zieminski and Alistair Bell)

Putting the back in greenback

Oct 7 (Reuters) – The greenback is back.

The dollar chalked up its second straight daily increase of around 1% on Thursday to bring its year-to-date rise up to 17%. This would be the biggest annual appreciation since the era of free-floating exchange rates was introduced half a century ago.

This is ominous for US corporate profits, global financial conditions and central banks around the world battling to prevent historically low exchange rates from weakening further.

Many Asian currencies enjoyed a breather over the past week as the US dollar’s rally lost steam, although the Indian rupee hit a record low on Thursday and the Japanese yen was set for its lowest New York daily close in 24 years around 145 per dollar. Intervention territory? You’d think so.

These pressures look set to dominate Friday’s session, contributing to a more volatile end to the week.

The resurgent dollar is also a suitable backdrop against which China and Japan – the world’s largest FX reserve holders with a combined USD 4.3 trillion, about a third of the global total – release their September reserves data.

They will be closely scrutinized to see how much may have been spent on FX intervention in the month, official or otherwise.

Asian stocks are likely to open lower on Friday, following Wall Street’s slide into the red on Thursday. The dollar’s drag on US and global stocks cannot be underestimated – around a third of S&P 500 firms’ revenues come from overseas.

Morgan Stanley reckons the dollar represents a 10% headwind to US earnings this year and Citi reckons FX effects will have the greatest impact on discretionary retail, the sector S&P Global says is fast becoming the riskiest on Wall Street.

Key developments that could provide more direction to markets on Friday:

South Korea current account (August)

Japan household spending (August)

Japan FX reserves (September)

China FX reserves (September)

Indonesia FX reserves (September)

Australia RBA financial stability review

US non-farm payrolls (September)

Fed’s Williams, Bostic and Kashkari speak

(Reporting by Jamie NcGeever in Orlando, Fla.; Editing by Josie Kao)

US yields move higher with payrolls report on deck

NEW YORK, Oct 6 (Reuters) – The yield on the benchmark US 10-year Treasury rose on Thursday after a reading on the labor market showed unemployment benefit claims rose by the most in four months last week ahead of the monthly payrolls report.

Yields briefly moved lower after the data that said initial jobless claims rose by 29,000 to a seasonally adjusted 219,000 versus expectations of economists polled by Reuters for 203,000 applications. Some of the rise, however, was attributed to Hurricane Fiona as filings surged in Puerto Rico in the wake of the storm.

Investor focus now turns to the September jobs report, with expectations for nonfarm payrolls to increase by 250,000 jobs and the unemployment rate to stay unchanged at 3.7%.

“Everybody is kind of waiting, that’s why we are a little bit rangebound both on stocks and bonds because if that jobs report print is really hot, that could be a big negative for bonds and crush the stock market, or vice versa,” said Jay Hatfield, founder and CEO of Infrastructure Capital Management in New York.

“Claims were pretty weak today and those are leading indicators of employment but notwithstanding that, the employment report is what everybody is waiting for to see whether we head back to the 4% level.”

The yield on 10-year Treasury notes was up 5.9 basis points to 3.818%.

Treasury yields have been sensitive this week to any signs the labor market might be slowing in hopes it would give the US Federal Reserve room to pivot to a less hawkish policy stance and slow its rate of interest rate hikes after three straight increases of 75 basis points (bps).

But Fed officials have been consistent in recent comments that the central bank will take aggressive measures in hiking interest rates to combat rising inflation, raising concerns among investors it could tilt the economy into a recession.

On Thursday, Minneapolis Federal Reserve Bank President Neel Kashkari said the Fed has “more work to do” on bringing down inflation, and is “quite a ways away” from being able to pause its aggressive interest-rate hikes.

Echoing those comments, Federal Reserve Governor Lisa Cook said US inflation remains “stubbornly and unacceptably high” and requires continued interest rate increases ensure it begins falling while Chicago Federal Reserve Bank President Charles Evans said the Fed’s policy rate is likely headed to 4.5%-4.75% by the spring of 2023 as it tries to curb inflation.

The yield on the 30-year Treasury bond was up 2.5 basis points to 3.790%.

A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as a reliable indicator of a recession when inverted, was at a negative 42.5 basis points, up from the negative 57.85 hit on September 22.

The two-year US Treasury yield, which typically moves in step with interest rate expectations, was up 9.1 basis points at 4.241%.

The breakeven rate on five-year US Treasury Inflation-Protected Securities (TIPS) was last at 2.346%, after closing at 2.319% on Wednesday.

The 10-year TIPS breakeven rate was last at 2.215%, indicating the market sees inflation averaging 2.22% a year for the next decade.

(Reporting by Chuck Mikolajczak; editing by Jonathan Oatis and Nick Zieminski)

Gold ticks lower as investors brace for US jobs data

Oct 6 (Reuters) – Gold prices dipped on Thursday, pressured by strength in the dollar and Treasury yields, while investors prepared for US jobs data that could influence the Federal Reserve’s monetary policy trajectory.

Spot gold fell 0.2% to USD 1,712.19 per ounce by 1358 EDT (1758 GMT). US gold futures settled flat at USD 1,720.8.

The dollar index rose about 1%, making greenback-priced gold more expensive for other currency holders. Benchmark US 10-year Treasury yields also firmed.

“We’re essentially just holding as we have a big jobs report tomorrow and then some inflation data next week … those would be two major data points to determine the next leg here for gold, looking forward to the next Fed meeting,” said Ryan McKay, commodity strategist at TD Securities.

The US Labor Department’s nonfarm payrolls data for September on Friday would follow a better-than-expected ADP National Employment report on Wednesday.

Another beat on jobs data ultimately would weigh on gold, McKay said, “as it would reinforce the need for the Fed to continue with their hawkish stance for a bit longer.”

The Institute for Supply Management’s non-manufacturing PMI reading also came in slightly above expectations, suggesting underlying strength in the economy despite rising interest rates.

Upbeat data and hawkish comments from San Francisco Federal Reserve President Mary Daly on Wednesday cooled any hopes of a policy pivot.

Gold is sensitive to rising interest rates, as these increase the opportunity cost of holding non-yielding bullion.

“Gold needs to see a sharper slowdown in the US and cooler prices for a bullish breakout to form,” Edward Moya, senior analyst with OANDA, said in a note.

“Gold seems poised to consolidate between USD 1,680 and USD 1,740 until we get both the NFP report and latest inflation readings.”

Spot silver fell 0.6% to USD 20.57 per ounce, while platinum firmed 0.5% to USD 923.12, and palladium gained 1.1% to USD 2,272.71.

(Reporting by Bharat Govind Gautam and Brijesh Patel in Bengaluru; Editing by Maju Samuel)

OPEC+ oil output cut ahead of winter fans inflation concerns

SINGAPORE, Oct 6 (Reuters) – Global oil supply is set to tighten, intensifying concerns over soaring inflation after the OPEC+ group of nations announced its largest supply cut since 2020 ahead of European Union embargoes on Russian energy.

The move has widened a diplomatic rift between the Saudi-backed bloc and Western nations, which worry higher energy prices will hurt the fragile global economy and hinder efforts to deprive Moscow of oil revenue following Russia’s invasion of Ukraine.

Global crude futures, jumped this week, returning to three-week highs, after the Organization of the Petroleum Exporting Countries and their allies, including Russia, on Wednesday agreed to slash output by 2 million barrels per day just ahead of peak winter season.

This is likely to drive spot prices higher, particularly for Middle East oil, which meets about two-third of Asia’s demand, industry participants said, adding to inflation concerns as governments from Japan to India fight rising costs of living while Europe is expected to burn more oil to replace Russian gas this winter.

“We are concerned about a resurgence in international oil prices, which have shown some signs of calming down since the second quarter,” a spokesperson at SK Energy, South Korea’s largest refiner, told Reuters.

Another South Korean refining source said the supply cut could drive prices back to levels seen in the second quarter.

South Korea, Asia’s fourth-largest economy and a manufacturing powerhouse, has seen costs skyrocket due to the surging commodity prices.

Brent hit USD 139.13 a barrel in March, the highest since 2008, after the Ukraine war sparked fears of Russian oil supply loss.

ACTUAL CUTS

Saudi Energy Minister Abdulaziz bin Salman said the real supply cut would be about 1 million to 1.1 million bpd, a response to rising global interest rates and a weakening world economy.

That move triggered a sharp response from Washington, which criticised the OPEC+ deal as shortsighted. The White House said President Joe Biden would continue to assess whether to release further strategic oil stocks to lower prices.

“Saudi, UAE (the United Arab Emirates) and Kuwait are likely to take up most of the burden of cuts,” said Tilak Doshi, managing director of Doshi Consulting, who was previously with Saudi Aramco.

“It’s a slap on Biden’s face by OPEC+,” he said, adding that ties between Russia and Saudi seem increasingly tight.

While the SK Energy spokesperson expects US reserves release to accelerate ahead of the US midterm elections in November, RBC Capital analysts said follow-on sales would likely be more incremental.

“We are unlikely to see another blockbuster release in the near term,” the bank added.

The OPEC+ cuts compound supply concerns as European Union sanctions on Russian crude and oil products take effect in December and February, respectively, prompting Morgan Stanley to raise oil price forecasts.

Industry participants estimate the loss of Russian crude at between 1 and 2 million bpd, depending on how Moscow reacts to the G7’s price cap on Russian oil. That policy is aimed at ensuring Russian oil continues flowing to emerging economies but at lower prices to reduce Moscow’s revenues.

“The market is still underpricing the actual loss,” said a Singapore-based crude oil trader who declined to be named due to company policy.

The move by OPEC+ prompted warnings from oil importing emerging markets, some of which have become particularly vulnerable to price shocks amid recent global supply snags.

Sri Lanka is battling its worst economic crisis since independence from Britain in 1948, with a plunge in its currency, runaway inflation and an acute dollar shortage to pay for essential imports of food, fuel and medicine.

President Ranil Wickremesinghe warned Sri Lanka will have to pay even more for fuel as richer countries stock up for their own needs.

“This is not just an issue faced by us but several other South Asian countries,” he told parliament on Thursday. “Global inflation is going to hit us all next year.”

(Reporting by Joyce Lee in Seoul and Florence Tan in Singapore; additional reporting by Nidhi Verma in New Delhi and Uditha Jayasinghe in Colombo; editing by Sam Holmes and Jason Neely)

Japan’s Nikkei hits two-week top amid jump in energy, chip shares

TOKYO, Oct 6 (Reuters) – Japan’s Nikkei index closed higher on Thursday, after touching a two-week peak during the session, as markets extended their rebound from multi-month lows, helped by energy and chip-related stocks.

The Nikkei share average ended 0.7% higher at 27,311.30, after reaching a high of 27,399.19, a level not seen since Sept. 21.

The benchmark faded in the final minutes of trading, after spending most of the afternoon preserving the strong gains from the morning.

The broader Topix rose 0.5% to 1,922.47, also gaining for a fourth day and touching a two-week peak of 1,930.47.

Gains were capped by caution ahead of a monthly US jobs report on Friday and a market holiday in Japan on Monday, market players said.

“From a technical perspective, the Nikkei gets top-heavy around the mid-27,000s,” said Kazuo Kamitani, an equity strategist at Nomura. “There’s a very high hurdle to pushing above 27,500.”

The Nikkei has climbed from as low as 25,621.96 on Monday, a level last seen on June 20.

Energy was the best performing Nikkei sector, up 1.24% amid a rise in crude oil prices to multi-week highs.

Chip shares also had an outsized influence on the Nikkei’s gain, following a 0.94% rally in the US Philadelphia SE Semiconductor Index overnight.

Chipmaking-equipment manufacturer Tokyo Electron rallied 2.76% and peer Advantest jumped 2.91%.

Rakuten Group was the biggest percentage gainer, leaping 4.58% following a local media report that Mizuho Financial Group would buy 20% of Rakuten Securities.

Mizuho said no formal decision had been made. Its shares slipped 0.16%.

“If this deal happens, it could be a mid- to long-term positive,” Hideyasu Ban, an equity analyst at Jefferies, wrote in a research note. “Mizuho FG needs to accelerate growth of its customer base (and) multiple alliances with companies that have their own eco-systems are a golden means.”

(Reporting by Kevin Buckland; Editing by Subhranshu Sahu and Uttaresh.V)

Asian shares climb, oil extends gains after OPEC+ deal

SYDNEY, Oct 6 (Reuters) – Asian shares rose on Thursday as the dollar wobbled ahead of US non-farm payrolls data, and oil prices gained for a fourth day after deep production cuts pledged by OPEC+ members.

The gains are likely to extend to European markets, with the pan-region Euro Stoxx 50 futures up 1.4% and FTSE futures 0.7% higher.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7%, marking its third straight day of gains. It is up 4.5% for the week after a staggering 13% drop in September.

Japan’s Nikkei stock index climbed 1.0% to its highest level since late September, driven by energy and chip-related stocks. South Korea advanced 1.5% while Australian shares reversed losses to be up 0.1%.

Hong Kong’s Hang Seng index also trimmed earlier losses to be off 0.2% on the day. Mainland Chinese markets remain closed for holidays.

Offshore risk sentiment remained buoyant. The S&P 500 futures rose 0.5% and Nasdaq futures increased 0.7%, building on a late rebound in US stocks which helped limit earlier losses.

The S&P 500 finished Wednesday 0.20% lower and the Nasdaq Composite ended down 0.25%.

The Refinitiv Asia Energy index surged 1.4%, after the Organization of the Petroleum Exporting Countries and allies agreed to cut oil production the deepest since the COVID-19 pandemic began, curbing supply in an already tight market.

Oil prices hit their highest level since mid-September. Brent crude futures were up 0.2% at USD 93.51 a barrel while US West Texas Intermediate (WTI) crude futures also gained 0.2% to USD 87.9 per barrel.

SO MUCH FOR FED PIVOT

Earlier this week, US job openings data suggesting that the labor market and economy were slowing as well as the Reserve Bank of Australia’s surprise move to raise rates by only 25 basis points fuelled hopes of less aggressive interest rate hikes by central banks and lifted risk sentiment.

But those hopes were dashed after the ADP National Employment Report showed private employment rising more than estimated in September and the Institute for Supply Management reported the service sector shrank less than expected in September and employment ticked up.

“The optimism that buoyed financial markets earlier this week receded as US data continued to articulate the need for further, decisive central bank policy action,” said analysts at ANZ.

“Attention is now firmly focused on the September labour market report… The market needs to prime for a strong number.”

US non-farm payrolls data is due on Friday and analysts polled by Reuters expect 250,000 jobs were added last month and unemployment to come in at 3.7%.

Overnight, San Francisco Federal Reserve President Mary Daly underscored the US central bank’s commitment to curbing inflation with more interest rate hikes, although she also said the Fed will not simply barrel ahead if the economy starts to crack.

Atlanta Fed president Raphael Bostic said the US Federal Reserve’s fight against inflation is likely “still in early days.”

In currency markets, the dollar eased 0.3% against a basket of major currencies on Thursday, after climbing 0.7% overnight on hawkish comments from Fed officials.

US Treasury yields were largely steady after jumping overnight.

The yield on benchmark ten-year notes was largely unchanged at 3.7471% while the yield on two-year notes stabilised at 4.1562%.

Gold was slightly higher. Spot gold was traded at USD 1,723.4489 per ounce.

(Reporting by Stella Qiu; Editing by Edwina Gibbs)

Gold gains on tepid dollar; traders eye US nonfarm payrolls

Oct 6 (Reuters) – Gold edged higher on Thursday, buoyed by a subdued dollar and Treasury yields, although prices were confined to a narrow range as investors awaited US nonfarm payrolls data that could affect the Federal Reserve’s rate hike strategy.

Spot gold was up 0.3% at USD 1,721.30 per ounce, as of 0653 GMT.

US gold futures rose 0.7% to USD 1,731.90.

Benchmark US 10-year Treasury yields eased after recording their biggest one-day jump since Sept. 26 on Wednesday, while the dollar index ticked 0.1% lower.

Lower yields decrease the opportunity cost of holding gold, which pays no interest.

“A weaker-than-expected non-farm payrolls print would likely constrain the Fed’s pace of tightening,” said Thomas Westwater, an analyst with DailyFX.

“That would assuage market fears and clear the way for higher gold prices by sapping the dollar’s safe-haven strength.”

US Labor Department’s more comprehensive watched nonfarm payrolls data due on Friday follows a strong ADP National Employment report released on Wednesday.

The ADP report showed private employment rose by 208,000 jobs last month, while separately the Institute for Supply Management’s non-manufacturing PMI reading came in slightly above expectations, suggesting underlying strength in the economy despite rising interest rates.

Upbeat data and hawkish comments from San Francisco Federal Reserve President Mary Daly on Wednesday cooled any hopes of a policy pivot.

“Gold needs to see a sharper slowdown in the US and cooler prices for a bullish breakout to form,” Edward Moya, senior analyst with OANDA said in a note.

“Gold seems poised to consolidate between USD 1,680 and USD 1,740 until we get both the NFP report and latest inflation readings.”

Indicative of sentiment, holdings of the SPDR Gold Trust GLD exchange-traded fund marked their third straight day of inflows on Wednesday.

Spot silver rose 0.1% to USD 20.72 per ounce, platinum was up 0.6% at USD 923.89 and palladium gained 0.6% to USD 2,260.61.

(Reporting by Eileen Soreng in Bengaluru; Editing by Sherry Jacob-Phillips)

Oil prices rise 1% on cuts to OPEC+ output targets

NEW YORK, Oct 6 (Reuters) – Oil prices rose about 1% on Thursday, holding at three-week highs after OPEC+ agreed to tighten global supply with a deal to cut production targets by 2 million barrels per day (bpd), the producers’ largest reduction since 2020.

Brent crude futures settled at USD 94.42 a barrel, up USD 1.05, or 1.1%. US West Texas Intermediate (WTI) crude futures settled at USD 88.45 a barrel, gaining 69 cents, or 0.8% after closing 1.4% up on Wednesday.

The agreement between the Organization of Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, comes ahead of a European Union embargo on Russian oil and would squeeze supplies in an already tight market, adding to inflation.

“We believe that the price impact of the announced measures will be significant,” said Jorge Leon, senior vice president at Rystad Energy. “By December this year, Brent would reach over USD 100/bbl, up from our earlier call for USD 89.”

Following the OPEC+ decision, Goldman Sachs raised its 2022 Brent forecast to USD 104 per barrel from USD 99, and its 2023 forecast to USD 110 from USD 108.

Saudi Energy Minister Abdulaziz bin Salman said the real supply cut would be about 1 million to 1.1 million bpd. Saudi Arabia’s share of the cut is about 500,000 bpd.

Iraq oil minister Ihsan Abdul Jabbar told Kuwait news agency (KUNA) the OPEC+ move came as result of a production surplus.

Several OPEC+ members have been struggling to produce at quota levels because of underinvestment and sanctions.

“Maybe Saudi Arabia, the UAE, Kuwait, and the ‘little train that could’ Kazakhstan may cut production to new quota, but I doubt anybody else will,” said Bob Yawger, director of energy futures at Mizuho in New York.

The output cut comes as the US Federal Reserve and other central banks are raising interest rates to fight inflation. Higher oil prices will likely cut demand, which could cap price gains, said John Kilduff, partner at Again Capital LLC in New York.

“That’s what’s cutting back the other way and why prices have stabilized for WTI just under USD 90,” Kilduff said.

US President Joe Biden expressed disappointment over OPEC+ plans and said the United States was looking at ways to keep prices from rising.

“There’s a lot of alternatives. We haven’t made up our minds yet,” Biden told reporters at the White House.

Earlier, the White House said Biden would continue to assess whether to release more supplies from the Strategic Petroleum Reserve and would consult Congress on other ways to reduce market control of OPEC and its allies.

(Additional reporting by Ahmad Ghaddar and Florence Tan in Singapore; Editing by Marguerita Choy and David Gregorio)

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