Oil prices climbed Wednesday as OPEC and Russia-led allies announced a major cut in output, while a stocks rally ran out of gas.
The pound, meanwhile, continued to suffer against the dollar over fears for Britain’s recession-threatened economy, falling around two percent to slide under $1.13.
In Vienna, ministers from the 13-nation OPEC cartel and its 10 Russian-led allies agreed to reduce two million barrels per day from November.
It is the biggest cut since the height of the Covid pandemic in 2020, and came despite concerns it could fuel inflation further and push central banks to further hike interest rates and therefore increase the chances of a global recession.
Oil prices had slid back to their levels before the war in Ukraine in recent weeks on concerns of a global slowdown, but have surged in recent days on expectations of the production cut
The main international crude contract, Brent, jumped two percent following the decision.
“Oil futures are expected to continue their rally in the short and medium term, but continued concerns over a global recession and rising inflation are likely to limit the long-term upside,” said Srijan Katyal, Global Head of Strategy and Trading Services at the international brokerage ADSS. (NDTV)