London Daily

Focus on the big picture.
Friday, Jun 20, 2025

Oil Prices Rise As OPEC, Russia-Led Allies Announce Major Output Cut

Oil Prices Rise As OPEC, Russia-Led Allies Announce Major Output Cut

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.

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.

Swissquote analyst Ipek Ozkardeskaya warned that the big cut could "backfire" on OPEC+ if investors fear that it will push inflation higher and force central banks to hike interest rates so much that it will trigger a recession.

"The higher the energy prices, the sharper the central banks must kill demand to pull the prices lower," she said before the decision was announced.

"Therefore, a big cut in OPEC production could well backfire, and trigger profit taking and fall in oil prices today," she added.

Rally loses steam


Meanwhile, a stocks rally triggered by disappointing US data on Monday that fuelled hopes the US Federal Reserve could let up in its campaign of aggressive interest rate hikes to tame inflation has petered out.

European stocks finished lower across the board, and Wall Street's main indices were down sharply in late morning trading.

"Market participants are being forced to contend with the possibility that the Fed won't acquiesce to the stock market's hopeful wishes," said analyst Patrick O'Hare at Briefing.com.

In currency trading, the pound took another beating as a speech by British Prime Minister Liz Truss failed to reassure investors about her controversial fiscal plans.

"As Prime Minister Liz Truss took to the stage to try and shore up her support among her party and the country, the pound fell further back and government borrowing costs rose slightly," said market analyst Susannah Streeter at Hargreaves Lansdown brokerage.

"The speech will do little to quell dissent over worries that public services will bear the brunt of the tax cuts plans" she added.

Comments

Oh ya 3 year ago
So OPEC gave slow joe the finger and to think he was just over seas sucking dick to get them to produce more.. And as long as the US keeps raising rates, other world currencies will tumble as investors flee into US bonds for a higher interest rate return. The US is throwing the Euro under the bus to try to stay the world reserve currency. The same way they threw Europe under the bus by blowing up the pipeline to make them dependent on US LNG. Having the US as a friend can be very deadly

Newsletter

Related Articles

0:00
0:00
Close
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
UK Home Secretary Apologizes Over Child Grooming Failures
Trump Organization Launches 5G Mobile Network and Golden Handset
Towcester Hosts 2025 English Greyhound Derby Amid Industry Scrutiny
Gary Oldman and David Beckham Knighted in King's Birthday Honours
Over 30,000 Lightning Strikes Recorded Across UK During Overnight Storms
Princess of Wales Returns to Public Duties at Trooping the Colour
Red Arrows Use Sustainable Fuel in Historic Trooping the Colour Flypast
Former Welsh First Minister Addresses Unionist Concerns Over Irish Language
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
France Bars Israeli Arms Companies from Paris Defense Expo
King Charles Leads Tribute to Air India Crash Victims at Trooping the Colour
Jack Pitchford Embarks on 200-Mile Walk to Support Stem Cell Charity
Surrey Hikers Take on Challenge of Climbing 11 Peaks in a Single Day
UK Deploys RAF Jets to Middle East Amid Israel-Iran Tensions
Two Skydivers Die in 'Tragic Accident' at Devon Airfield
Sainsbury's and Morrisons Accused of Displaying Prohibited Tobacco Ads
UK Launches National Inquiry into Grooming Gangs
Families Seek Closure After Air India Crash
Gold Emerges as Global Safe Haven Amid Uncertainty
Trump Reports $57 Million Earnings from Crypto Venture
Trump's Military Parade Sparks Concerns Over Authoritarianism
Nationwide 'No Kings' Protests Challenge Trump's Leadership
UK Deploys Jets to Middle East Amid Rising Tensions
Trump's Anti-War Stance Tested Amid Israel-Iran Conflict
Germany Holds First Veterans Celebration Since WWII
U.S. Health Secretary Dismisses CDC Vaccine Advisory Committee
Minnesota Lawmaker Melissa Hortman and Husband Killed in Targeted Attack; Senator John Hoffman and Wife Injured
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
×