RIYADH: After erasing early losses on Thursday, oil prices gained as OPEC+ agreed to raise output by 648,000 barrels per day in July and August, sources told Reuters.
Brent futures rose 40 cents, or 0.3 percent, to $116.69 a barrel by 9:36 a.m. EDT, while US West Texas Intermediate crude rose 49 cents, or 0.4 percent, to $115.75.
The decision to raise the output was taken during the 29th OPEC and non-OPEC Ministerial Meeting, which also highlighted the importance of stable and balanced markets for both crude oil and refined products, according to a press release.
The meeting also decided to extend the compensation period until the end of December 2022 as requested by some underperforming countries. These countries, however, should submit their plans by June 17, 2022, the release added.
The alliance of petroleum producers also noted that the compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting.
The 30th OPEC and non-OPEC Ministerial Meeting will be conducted on June 30, 2022.
The meeting today was to discuss the production agreement and the hike in output amidst rising Western calls for a faster increase to lower surging prices.
Ahead of the OPEC+ meeting, oil prices fell on Thursday in anticipation that Saudi Arabia may agree to increase production.
Brent crude was down $2.08, or 1.8 percent, at $114.21 a barrel at 04.10 GMT. US West Texas Intermediate crude dropped $2.25, or 2.0 percent to $113.01 a barrel, after a 0.5 percent rise on Wednesday.
Meanwhile, two OPEC+ sources told Reuters on Thursday that OPEC+ is working on compensating for a drop in Russian oil output, as Russia's production has fallen by around 1 million barrels per day in recent months as a result of Western sanctions on Moscow over Ukraine.
One OPEC+ source familiar with the Russian position said Moscow could agree to other producers compensating for its lower output but it may not happen at a Thursday meeting and might not be in full.
A Gulf OPEC+ source told Reuters that a decision on the matter was "highly possible" at a meeting on Thursday.
The oil market has been impacted by the increasing Western sanctions on Russia, resulting in volatility in oil prices.
On Tuesday, Saudi Arabia and Russia praised the level of cooperation inside OPEC+ after Russian Foreign Minister Sergei Lavrov met Saudi counterpart Prince Faisal bin Farhan Al Saud in Riyadh.
The Russian ministry issued these comments at a time when several western media outlets reported that some of the OPEC+ members are seriously considering removing Russia from the alliance.
(With inputs from Reuters)