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Crude oil prices top $115/barrel after OPEC+ pledges to boost output

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Yahoo Finance Live anchors discuss the rise in crude oil.

Video Transcript

AKIKO FUJITA: Let's turn our attention to oil. Some big moves there on that front today, Brian, because we saw OPEC+ agreeing to increase output faster than expected by roughly 650,000 barrels a day. Now, it's important to note, 650,000, it's not a lot when you consider that more than, roughly, a million barrels a day have been taken offline because of Russia, the conflict with Ukraine. But this is a big reversal for Saudi Arabia.

BRIAN CHEUNG: Well, it's a big reversal. And we have to keep in mind that 648,000 barrel a day announcement from OPEC+, one of the more boring streaming services, in my opinion, is actually more than expected. Do you get it, Plus?

AKIKO FUJITA: Oh, we got the joke, yes.

BRIAN CHEUNG: OK, we got the joke, yeah, but it was more than expected. So regardless of how you kind of cut it or slice it, that increase in supply, you would hope, would be better for oil prices, which have remained extremely elevated. However, we did see crude oil in both Brent and regular measures go up in the wake of that announcement, crude oil now at about $115 a barrel. Keep in mind, very elevated and basically back up to those highs that we had seen earlier in March.

AKIKO FUJITA: Well, and we're seeing that move because I think the market understands that this is not going to make a huge dent when you think about the shortage that's now been created as a result of a lot of Russian oil coming offline, the Western sanctions, which could increase or decrease output by as much as two to three million barrels a day. Now, important to note this point on Saudi Arabia, though, because there is a bit of a thawing that's happening.

The fact that Saudi Arabia moved-- obviously, they're de facto leader of OPEC. The fact that they moved points to the fact that they are hearing the US demands. Of course, there's been a lot of conversations behind the scenes. There's reports today from Bloomberg that President Biden is now--

BRIAN CHEUNG: A meeting, perhaps.

AKIKO FUJITA: --considering a visit to Saudi Arabia next month. And just keep in mind, like, we've been talking about the supply-demand issue. And yet Saudi Arabia, at least publicly, has maintained that there's no real genuine shortage. And we've seen the shift today. So, not significant when you consider--

BRIAN CHEUNG: But you do wonder if that tone might be starting to change. And again, it is very obvious, if that meeting does happen between Biden and Saudi Arabia, what the goal of that meeting is going to be.