Oil prices rise on possible Russian production cut

Oil prices increased on Friday amid investors' concern over a possible Russian production cut.
Oil prices rise on possible Russian production cut
Oil prices rise on possible Russian production cut

The West Texas Intermediate (WTI) for February delivery increased 2.07 USD to settle at 79.56 USD a barrel on the New York Mercantile Exchange. Brent crude for February delivery gained 2.94 dollars, or 3.63 percent, to close at 83.92 dollars a barrel on the London ICE Futures Exchange.

Statistics showed that WTI for February delivery reached 80.33 dollars per barrel in the morning session before giving up some gains.

WTI oil is currently trying to settle above the level of 80 dollars as traders react to the latest news from Russia, noted Vladimir Zernov, market analyst with market information supplier FX Empire.

Russia could cut its crude oil production by 5-7 percent in early 2023 in response to price caps imposed by Western countries in early December, according to media reports on Friday quoting Russian Deputy Prime Minister Alexander Novak.

The world's oil supply could become tighter, as the Organization of the Petroleum Exporting Countries (OPEC) and its allies already adopted a deep production cut of 2 million barrels per day starting from November, 2022.

The European Union, the Group of Seven nations and Australia started to impose a price cap on Russian seaborne crude in early December, which prohibits participating countries from providing the services that allow Russian oil to be shipped by sea if the price rises above 60 dollars per barrel, such as insurance and finance.