Oil prices reverse higher as US inventories dive while energy giant says OPEC+ output boost isn't enough

• Oil prices turned higher after OPEC+ announced a larger-than-expected increase of oil output.
• The increase is not enough to offset Russia's missing barrels, according to the CEO of Hess.

Oil prices on Thursday reversed course and moved higher as a production increase by OPEC+ countries was viewed as potentially too little to offset the absence of Russian supply, while US crude inventories declined sharply.

On Thursday, OPEC+ agreed to boost oil output for July and August by a larger-than-expected amount amid Russia's invasion of Ukraine, and oil prices surged on the news.

The CEO of shale giant Hess, however, said the increased OPEC+ output isn't enough to offset the declining number of Russian barrels in the global market.

West Texas Intermediate moved 1.249% higher Thursday to $116.70, while Brent crude, the international benchmark, jumped about 1% to $117.47.

The international oil alliance will increase production by 648,000 barrels per day for the two summer months, inching closer to plugging the gap left by the roughly 10 million barrels per day it pulled from the market in April 2020 as the pandemic began.

Global energy markets have reeled since Russia launched its war on Ukraine. The OPEC decision follows the European Union's partial Russian oil embargo that passed this week, and the US sanctions against Russia from March.

Thursday's news also opens the door for Saudi Arabia to ramp up its own output if wartime sanctions force Russia to pump less crude.

OPEC+ and non-members like Russia agreed previously to lift production, but some countries have floated the idea of excluding Moscow from its quota after it missed its target.

In the US, domestic shortages have spurred record prices at the pump, as well as surges in the price of diesel, natural gas, and jet fuel.

President Biden has not yet worked with Saudi Arabia's Mohammed Bin Salam, and the crown prince has spurned calls from the White House. But with energy prices surging, pressure is mounting for Biden to visit Saudi Arabia, Bloomberg reports.