Oil prices witnessed an increase in the international market just a day after news that quoted OPEC sources saying that OPEC+ would consider an oil output cut of more than a million barrels per day (bpd) next week.
At around 05:40 GMT, Brent crude futures rose 41 cents, or 0.46%, to $89.27 per barrel after gaining more than 4% in the previous session. Similarly, the US WTI crude futures rose by 21 cents, or 0.25%, to $83.84 per barrel. The benchmark gained more than 5% in the previous session, which was its largest daily gain since May.
Oil prices rallied on Monday on renewed concerns about supply tightness. Investors expect the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, will cut output by more than 1 million barrels per day (bpd) at their first in-person meeting since 2020 on Wednesday.
The meeting will take place on October 5 against the backdrop of falling oil prices and months of severe market volatility, which prompted top OPEC+ producer Saudi Arabia to say the group could cut production.
Voluntary cuts by individual members could come on top of this, making it their largest cut since the start of the COVID-19 pandemic, OPEC sources said.
OPEC+, which combines OPEC countries and allies such as Russia, has refused to raise output to lower oil prices despite pressure from major consumers, including the United States, to help the global economy.
Oil prices rise as OPEC+ agree on small production cut
Prices have nevertheless fallen sharply in the last month due to fears about the global economy and a rally in the US dollar after the Federal Reserves raised rates.
Federal Reserve hikes key interest rate by 0.75% points
A significant production cut is poised to anger the United States, which has been putting pressure on Saudi Arabia to continue pumping more to help oil prices soften further and reduce revenues for Russia as the West seeks to punish Moscow for sending troops to Ukraine.
The West accuses Russia of invading Ukraine, but the Kremlin calls it a special military operation.
Saudi Arabia has not condemned Moscow’s actions amid difficult relations with the administration of US President Joe Biden.
