Oil extends gains by over 2% after OPEC+ sticks to gradual cuts

Crude prices rose more than 2% on Friday after OPEC+ producers rebuffed a U.S. call to pump more oil, sticking to their plan of hiking output gradually even as demand nears pre-pandemic levels.

Brent crude rose $1.73, or 2.2%, to $82.27 a barrel by 11:20 a.m. EDT (1520 GMT). West Texas Intermediate crude (WTI) gained $2.08, or 2.6% at $80.89.

The Organization of the Petroleum Exporting Countries and allies including Russia, collectively known as OPEC+, agreed on Thursday to stick to their plan to raise oil output by 400,000 barrels per day (bpd) from December, despite calls from U.S. President Joe Biden for extra output to cool rising prices.

The group has been restricting supply after the COVID-19 pandemic led to evaporation of demand.

U.S. retail gasoline prices are averaging nearly $3.50 a gallon, pressuring the White House after Biden on Saturday urged major G20 energy producers with spare capacity to boost output.

After the OPEC+ meeting, the White House said Washington would consider a full range of tools at its disposal to guarantee access to affordable energy, including the possibility of releasing oil from strategic petroleum reserves (SPR).

"Markets know that release of strategic reserves can only have a temporary bearish effect on prompt prices and is not a lasting solution for an imbalance between supply and demand," Rystad Energy`s head of oil markets Bjornar Tonhaugen said in a note.

"Luckily for consumers, the current deficit in the total oil market, which looks set to persist through December, will not last for long," Tonhaugen added.

Oil prices recently touched seven-year highs but fell this week after an increase in U.S. inventories and signs that high prices could encourage higher production elsewhere.

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Brent was on track for a weekly decline of about 2.5%, the second straight week the contract has fallen, while WTI headed for a decline this week of more than 3%.