The Petroleum Exporting Countries (OPEC) and its producer allies have decided to continue with their current production plans in the face of high crude oil prices and pressure from the United States to help cool the market.
The group, known as OPEC+, will adhere to a program of gradually increasing oil production by 400,000 bpd each month.
Russia's Energy Minister and Deputy Prime Minister Alexander Novak said at a press conference on Thursday that the oil producing allies "had previously decided to increase production by 400,000 (bpd) every month until the end of 2022. “Today, the previously agreed parameters were reiterated to maintain the current situation,” he said.
The White House said Washington will consider a number of tools at its disposal to ensure access to affordable energy.
Saudi Arabia, the de facto leader of OPEC, rejected calls for a faster increase in oil supply, citing economic negatives.
OPEC+ sources said the U.S. has ample capacity to increase production if the world economy believes it needs more energy. Sources said Saudi Arabia and Russia are confident that higher prices will not lead to a rapid increase in production from the US shale gas industry.
Saudi Energy Minister Prince Abdulaziz bin Salman said on Thursday that manufacturers are concerned about moving too quickly, fearing renewed setbacks in the fight against the pandemic and the pace of the economic recovery.
US labor market
The US labor market has improved last week as initial applications for unemployment insurance fell to a new low during the pandemic.
The first jobless claims filed in the week ending on October 30 fell to 269,000, down 14,000 from the previous period, the Department of Labor reported on Thursday. That's better than the Dow Jones estimate of 275,000.
The total number of recipients of aid under all programs fell from 157,731 to 2.67 million.
Nonfarm payrolls data to be released on Friday are expected to show hiring growth in the world's largest economy at a solid pace. Wages are expected to continue to rise in October as new Covid-19 cases decline and the economy improves.
The U.S. economy probably created 450,000 new jobs in October, according to economists polled by The Wall Street Journal and Dow Jones. If this forecast turns out to be correct, it will be a significant improvement over the weakest of 2021, the 194,000 figure in September.
However, even an increase of half a million isn't fast enough to alleviate the largest labor shortage in decades. About 5 million people in the US who had jobs before the pandemic still have not returned to work.
Policy comments from Bailey
Bank of England (BoE) Governor Andrew Bailey said there were "warning signs" about inflation, but added the central bank should see more positive evidence from the labor market before it raises interest rates.
The bank surprised markets by not changing interest rates on Thursday.
Bailey was among officials who remained hawkish until the November policy meeting, but the Monetary Policy Committee voted 7 to 2 to keep the benchmark rate at the historic low of 0.1%.
When asked whether Thursday's policy decision had hurt the bank's credibility, Bailey stressed that MPC's previous words that it needed to take action on inflation were "conditional" as to whether medium-term inflation expectations would go "naked."
Bailey has already stated that raising interest rates could “reduce household income” and “cause more unemployment.”
MPC has also decided to continue its current £875bn UK government bond buying programme.
US stocks
The S&P 500 rose for the sixth day in a row as investors took a patient stance on the Fed's interest rate hikes. Stronger-than-expected economic data also boosted the sentiment.
The broad equity benchmark increased 0.4% to another record close at 4,680.06.
The tech-heavy Nasdaq Composite rose 0.8% to hit an all-time high of 15,940.31. The Dow Jones Industrial Average fell 33.35 points, or about 0.1%, to 36,124.23, driven by losses from Goldman Sachs and JPMorgan.
The central bank said it will begin to slow down its bond-buying program later this month, signaling that the economy can now cope with the easing of pandemic stimulus.
Investors have been waiting for this action for a long time.
