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Oil prices rise in advance of OPEC+ meeting

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Oilfield Technology,

As reported by Reuters, oil prices rose on Tuesday, with traders waiting to see whether OPEC+ members agree to extend their huge output cuts to shore up prices at a virtual meeting expected later this week.

Brent crude LCOc1 futures rose 0.94%, or US$0.36, to US$38.68/bbl as of 0630 GMT. West Texas Intermediate (WTI) crude CLc1 futures rose 0.73%, or US$0.26, to US$35.70/bbl. Brent has doubled over the past six weeks, thanks to supply cuts by OPEC+. Both Brent and WTI prices, however, are still down about 40% for the year so far.

OPEC+ producers are considering extending their output cut of 9.7 million bpd, about 10% of global production, into July or August, at an online meeting likely to be held on 4 June.

Under the OPEC+ plan agreed in April, the record supply cut was to be for May and June, scaling back to a cut of 7.7 million bpd from July through December. Saudi Arabia has been leading talks to push for extending the heftier cuts, sources told Reuters last week.

A drop in crude stockpiles at Cushing, Oklahoma, US, which fell to 54.3 million bbl in the week to 29 May, also buoyed prices, traders said, citing a Genscape report on Monday.

A preliminary Reuters poll, however, showed that overall US crude oil stocks likely increased last week.

Price gains have been capped by trade tension between China and the US over Beijing’s security legislation in Hong Kong, as well as manufacturing data on Monday showing the world’s factories were still struggling.

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