(Bloomberg) -- Oil advanced in early Asian trading as investors assessed the potential supply response from the U.S. to a gradual increase in output from OPEC+, which may include the release of strategic reserves.
Futures in New York climbed almost 1% toward $80 a barrel after sliding 2.5% on Thursday. After a brief meeting, the alliance agreed to boost production by 400,000 barrels a day in December, maintaining its modest pace of monthly increases. The White House is considering a range of tools to deal with oil prices, a National Security council spokesperson said after the OPEC+ decision.
See also: U.S. to OPEC+: ‘This Isn’t the End’ of Effort to Ease Oil Prices
President Joe Biden has led calls for OPEC+ to add more barrels to tame high oil prices, which he blames for inflationary pressure. The U.S. was seeking an increase of as much as double the agreed amount and has been among key consumers that previously raised the prospect of tapping their own strategic reserves if the alliance didn’t heed the call to hike production.
Oil has rallied to multiyear highs as major economies including the U.S. and China recovered from the pandemic, with BP (NYSE:BP) Plc estimating global demand has rebounded above the pre-virus level of 100 million barrels a day. OPEC+ has cited risks from ongoing outbreaks for its cautious approach.
A global supply crunch due to coal and natural gas shortages has also exacerbated the tightness in the oil market, while some OPEC members failing to reach their output targets has put additional pressure on crude supply.
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