Oil gains as focus switches to OPEC+ extending output cuts

Oil prices rose on Tuesday as shipping traffic resumed through the Suez Canal after days on hold and focus turned to an OPEC+ meeting this week where the extension of supply curbs may be on the table amid new coronavirus pandemic lockdowns. Brent crude was down 21 cents, or 0.3%, at $65.19 a barrel by 0411 GMT. U.S. oil was up 19 cents, or 0.3%, at $61.75 a barrel.

Ships were moving through the Suez Canal again on Tuesday after tugs refloated the giant Ever Given container carrier, which had been blocking a narrow section of the passage for almost a week, causing a huge build-up of vessels around the waterway. With the likelihood that the disruption will prove minimal, the market is turning its focus to Thursday’s meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia in Vienna, collectively known as OPEC+.

“The Saudi-led decision to hold back more oil production will yield an extraordinarily tight oil market with global stock draws,” said Avtar Sandu, senior commodities manager at Phillip Futures in Singapore. OPEC+ will discuss whether to keep in place curbs on output that have kept millions of barrels a day off the market to support prices, a strategy that has largely worked in recent months. Saudi Arabia is prepared to accept an extension of the production cuts through June, and is also ready to prolong voluntary unilateral curbs amid the latest wave of coronavirus lockdowns, a source briefed on the matter said on Monday.

Oil gains as focus switches to OPEC+ extending output cuts, Reuters, Mar 30