Daily updates on foreign exchange news

Oil Drops Below $80 in Wild Reversal After OPEC Keeps Production Steady

Oil prices settled lower Thursday after giving up gains on profit taking following the decision by OPEC and its allies to stick their plan to gradually boost production, defying calls from President Joe Biden to ramp-up production.


On the New York Mercantile Exchange, crude futures fell $2.05 to settle at $78.81 a barrel, while on London's Intercontinental Exchange (NYSE:ICE), Brent slipped $1.45 to to trade at $80.54 a barrel.


OPEC and its allies including Russia decided to stick with their previous plan to raise oil production by a 400,000 barrels a day next month.


Biden earlier this week blamed the rise in energy prices on "the refusal of Russia or the OPEC nations to pump more oil."


The major oil producers, however, weren't willing to heed the president's calls, insisting that its current production accord would foster “a stable and balanced oil market."


The White House hit back against the oil cartel and its allies' decision, saying the "global recovery should not be imperiled by a mismatch between supply and demand. OPEC+ seems unwilling to use the capacity and power it has now at this critical moment of global recovery."


The remarks from the White House stoked concerns that the U.S. could take measures including releasing strategic petroleum reserves to boost production and cap prices.


Also souring sentiment on oil, Saudi Energy Minister Prince Abdulaziz bin Salman stoked concerns about the oil demand outlook after reportedly saying that oil inventories would see "tremendous" builds at the end of 2021 and early 2022, according to an Al Arabiya TV report.