Saudi Arabia has rejected a plea by US president Joe Biden for a major increase in oil production to help ease the cost of living crisis .
Prices of the fuel edged higher after the Opec+ alliance, led by Saudi Arabia and Russia, announced it had agreed to increase supply by just 100,000 barrels per day from September.
Analysts said the move, equivalent to about 86 seconds of daily global oil demand, would do little to ease pressures on the market amid Russia's war on Ukraine.
Raad Alkadiri, managing director for energy, climate, and sustainability at Eurasia Group, told Reuters: "That is so little as to be meaningless. From a physical standpoint it is a marginal blip. As a political gesture it is almost insulting."
Paul Horsnell, head of commodities research at Standard Chartered, told Bloomberg: "A bit mystified as to the point of doing 100,000 barrels a day rather than zero, for practical and measurement purposes it is zero.”
Brent Crude has climbed 1.2pc today to $101.77 while WTI is up 1.93pc to $96.24 per barrel.
The decision at today's meeting in Vienna comes weeks after US President Joe Biden travelled to Saudi Arabia in July to meet with Saudi Arabia's Crown Prince Mohammed bin Salman and request him to pump more oil. Boris Johnson had also met with the crown prince in March.
Tight supplies have triggered a 25pc surge in oil prices since the start of the year, from $80 to $100 for Brent Crude.
That has pushed up pump prices around the world, adding to inflation which is running at levels not seen for 40 years in the US and the UK.
As of Tuesday average UK petrol prices were 180.7 pence per litre, meaning it costs more than £99 to fill up a family car.
Saudi Arabia is keen to bolster relations with the US but also needs to maintain its ties to Russia, whose exports are being restricted by sanctions following its invasion of Ukraine.
Ahead of the meeting, Tamas Varga, analyst at oil broker PVM, told AFP: “Saudi Arabia and its allies will have to decide whether to heed Joe Biden’s request and raise production or show solidarity towards Russia by staying put.”
The 23-member Opec-plus cartel cut production in 2020 after a slump in demand due to pandemic lockdowns triggered a price crash.
It has since gradually unwound all the production cuts, although some countries have not managed to meet their commitments.
Many remain cautious about further increases in production due to fears that possible recessions could curb demand again.
In its monthly oil outlook report in July, the International Energy Agency (IEA) said the outlook for the oil market had "rarely been more uncertain".
It added: "A worsening macroeconomic outlook and fears of recession are weighing on market sentiment, while there are ongoing risks on the supply side."
As of June, global oil production was 99.5 million barrels per day, an increase of 690,000 barrels per day compared to the previous month.
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