Oil Futures Settle Sharply Higher On OPEC+ Production Cut Bets

Crude oil prices rose sharply on Monday amid speculation the Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+ will discuss cutting crude output at their upcoming meeting on Wednesday.

A weaker dollar contributed as well to the surge in crude oil prices. The dollar shed ground after the British government reversed plans to cut the highest rate of income tax.

West Texas Intermediate Crude oil futures for November ended higher by $4.14 or about 5.2% at $83.63 a barrel.

Brent crude futures were up $3.73 or 4.69% at $83.22 a barrel a little while ago.

According to media reports, the OPEC+ may consider cutting output by more than 1 million barrels a day for its biggest reduction since the pandemic, to support falling prices.

The group at the previous meeting had reversed the 100,000-barrels-per-day increase for September and returned the October quota to the levels from August.

The U.K. government’s plan to scrap the 45% tax rate came under severe criticism from several quarter, including from the International Monetary Fund (IMF).

The IMF called the U.K.’s unfunded tax cuts “excessive” and said they needed to be revised. “Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy,” an IMF spokesperson said in a statement last week. “Furthermore, the nature of the UK measures will likely increase inequality.”

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