Oil prices gain after OPEC+ maintains output cuts

INA-  sources

Oil prices rose in early trade on Friday following a decision by OPEC+ to keep its oil output policy unchanged,
 Brent crude futures rose 50 cents, or 0.6%, to $79.20 a barrel at 0155 GMT, while U.S. West Texas Intermediate crude futures gained 40 cents, or 0.5%, to $74.22 a barrel. 

On Thursday, two OPEC+ sources said the group has kept its oil output policy unchanged, and will decide in March whether or not to extend the voluntary oil production cuts in place for the first quarter. 

The Organization of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, has outputs cuts of 2.2 million barrels per day (bpd) in place for the first quarter, as announced in November. 

ANZ Research analysts said in a Friday note those production cuts should keep supply tight in the first quarter, with non-OPEC production increases set to normalize and U.S. output growth slowing in 2024 to 300,000 barrels per day (bpd) from 800,000 bpd last year. 

Also supporting oil prices were the U.S. Federal Reserve’s decision to keep the benchmark overnight interest rate in the 5.25-5.50% range, and comments by Chair Jerome Powell who said that interest rates had peaked and would move lower in coming months.

 Lower interest rates would reduce consumer borrowing costs, which can boost economic growth and oil demand.