Oil rises near seven-year high as OPEC+ sticks to output plan

Oil prices jumped on Wednesday, heading near a previous seven-year high, after OPEC+ decided to stick to its planned output increase despite pressure from top consumers to raise production more quickly.

A source told Reuters that OPEC+ agreed to increase oil production by 400,000 bpd from March after a short meeting.

Brent crude was up $1.16 cents, or 1.3%, at $90.32 a barrel by 1303 GMT.

U.S. West Texas Intermediate crude rose $1.28 to $89.48 a barrel.

Tight oil supplies and geopolitical tensions in Eastern Europe and the Middle East have boosted oil prices by about 15% this year. On Friday crude benchmarks hit their highest since October 2014, with Brent touching $91.70 and U.S. crude hitting $88.84.

“Bearish EIA statistics this afternoon might be used as an excuse for profit-taking. Unless the weather warms and Ukraine tensions are settled, oil should remain supported,” said PVM Oil Associates analyst Tamas Varga, adding that cold weather in the United States should also support prices.

A major winter storm is expected to wallop much of the central United States and stretch to parts of the Northeast this week, bringing heavy snow, freezing rain, and ice, the National Weather Service said on Monday. The storm comes days after a deadly winter blast.

U.S. crude stocks fell by 1.6 million barrels for the week ended Jan. 28, against analysts’ estimate of an increase of 1.5 million barrels, according to market sources citing American Petroleum Institute figures on Tuesday.

But gasoline inventories rose by 5.8 million barrels, above analysts’ expectations for a 1.6 million barrel build. The Energy Information Administration, the statistical arm of the U.S. Department of Energy, is due to release fresh weekly data later on Wednesday.[EIA/S]

Tensions between Russia and the West also underpinned crude prices. Russia, the world’s second-largest oil producer, and the West have been at loggerheads over Ukraine, fanning fears that energy supplies to Europe could be disrupted.

On Tuesday, Russian President Vladimir Putin accused the West of deliberately creating a scenario designed to lure it into war and ignoring Russia’s security concerns over Ukraine.