Oil prices rose on Tuesday with the Brent benchmark rising above $80 a barrel, supported by expectations that the OPEC+ producer group may deepen and extend output cuts due to concern over softer global demand.
OPEC+, which combines the Organization of the Petroleum Exporting Countries (OPEC)) and allies including Russia, will hold an online ministerial meeting on Thursday to discuss production targets for 2024.
Brent crude futures were up 72 cents, or 0.9%, at $80.70 a barrel at 0921 GMT. U.S. West Texas Intermediate (WTI) crude futures gained 69 cents, or 0.9%, at $75.55.
“Barring any negative surprise, the recent drop in prices will probably be viewed as a buying opportunity, especially if further cuts are agreed,” said Tamas Varga of oil broker PVM, referring to the OPEC+ meeting.
Last week, the market tumbled when OPEC+ – the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia – postponed to Nov. 30 a ministerial meeting to iron out differences on production targets for African producers.
The group has since moved towards a compromise, four OPEC+ sources told Reuters on Friday, potentially helping the group’s de facto leader Saudi Arabia find consensus on the need to deepen output cuts.
“Saudi Arabia may be comforted that U.S. gasoline prices have fallen for 60 straight days. This may soften the U.S. opposition to any move to tighten oil markets and support prices,” ANZ Research said in a note on Tuesday. Oil also found support from a weak dollar – which makes oil cheaper for holders of other currencies and tends to reflect greater risk appetite among investors – and from expectations U.S. crude inventories declined last week.
Four analysts polled by Reuters estimated on average that the latest round of weekly U.S. supply reports will show crude inventories fell by about 2 million barrels.
The first of this week’s two reports is out at 2130 GMT from the American Petroleum Institute industry group.