Oil prices rose more than 2% on Friday, on track for weekly gains of over 8%, as Russia announced plans to reduce oil production next month after the West imposed price caps on the country’s oil and oil products.
Brent crude futures rose $2.11, or 2.5%, to $86.61 a barrel by 11:15 a.m. EST (1615 GMT). U.S. West Texas Intermediate (WTI) crude futures were up $1.91, or 2.5%, at $79.97.
Brent was on course for a weekly gain of 8.2%, while U.S. crude was on track for an 8.8% rise
Russia plans to reduce its crude oil production in March by 500,000 barrels per day (bpd), or about 5% of output, Deputy Prime Minister Alexander Novak said.
Western nations have imposed restrictions, trying to choke off Russia’s oil revenues in response to the country’s actions in Ukraine. The production cut indicates that the European Union’s recent price cap and ban on Russian oil products, which came into effect on Feb. 5, have had some impact.
“We believe the decision (to cut oil production) is not completely a voluntary one … as market factors likely forced the Russian side to make this decision,” said UBS analyst Giovanni Staunovo.
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