LONDON - Oil rose almost 2% on Friday and was headed for a second consecutive weekly gain supported by an OPEC+ decision to make its largest supply cut since 2020 despite concern about recession and rising interest rates.
The cut from the Organization of Petroleum Exporting Countries and allies including Russia, known as OPEC+, comes ahead of a European Union embargo on Russian oil and will squeeze supply in an already tight market.
Brent crude was up $1.70, or 1.8%, to $96.12 a barrel at 1348 GMT. U.S. West Texas Intermediate or WTI crude gained $1.72, or 1.9%, to $90.17.
"Among the key ramifications of OPEC's latest cut is a likely return of $100 oil," said Stephen Brennock of oil broker PVM. "Gains, however, will be capped by mounting economic headwinds."
Both benchmarks were heading for a second weekly gain, with that of Brent exceeding 9% this week. The global benchmark is still down sharply after coming close to its all-time high of $147 a barrel in March after Russia invaded Ukraine.
"With Brent now firmly back in the $90-100 range, the group will likely be pleased with the outcome although substantial uncertainty remains over the economic outlook," said Craig Erlam of brokerage OANDA, referring to OPEC+.
Oil's rally continued even as the dollar moved higher after data showing the U.S. economy was creating jobs at a strong pace gave the Federal Reserve cover to continue with hefty interest rate hikes.
Dollar strength makes oil more expensive for other currency holders and tends to weigh on oil and other risk assets.
U.S. President Joe Biden expressed disappointment on Thursday over the OPEC+ plans and he and officials said the United States was looking at all possible alternatives to keep prices from rising.
(Additional reporting by Mohi Narayan; editing by Jason Neely, Kirsten Donovan)