Oil prices rise ahead of OPEC+ meeting on extended output cuts

Oil prices rose on Tuesday, with traders waiting to see whether major producers agree to extend their huge output cuts to shore up prices at a virtual meeting expected later this week.

Brent crude futures rose 0.94%, or 36 cents, to $38.68 a barrel as of 0630 GMT.

West Texas Intermediate (WTI) crude futures rose 0.73%, or 26 cents, to $35.70 a barrel.

Brent has doubled over the past six weeks, thanks to supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, a grouping dubbed 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 barrels per day (bpd), about 10% of global production, into July or August, at an online meeting likely to be held on June 4.

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.

An extension could push oil prices to $40, but there would have to be follow-through on that commitment to sustain higher prices, said Commonwealth Bank’s Dhar.

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

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

Oil prices rise ahead of OPEC+ meeting on extended output cuts, Reuters, Jun 2