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Oil rises as traders wait for OPEC + meeting to extend supply cuts

by Bunkerist
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Oil rose on Friday while investors are waiting for clues from this weekend meeting, where major oil producers will discuss whether to extend record production cuts.

Brent crude futures were up 27 cents, or 0.7%, at $40.26 a barrel as of 0620 GMT, while West Texas Intermediate (WTI) crude futures rose 17 cents, or 0.5%, to $37.58 a barrel.

Brent increased by about 14% this week and WTI by about 6%, both recorded its sixth weekly gain. Signs of improved fuel demand as countries began to alleviate the deadlocks imposed to prevent the spread of the new coronavirus triggered the increases.

The group known as OPEC +, including Russia, the Organization of the Petroleum Exporting Countries (OPEC) and its allies will meet on Saturday, according to a report from the Algerian TV channel based on the OPEC source.

Three OPEC + sources said earlier this week that if Iraq and others agree to increase their commitment to current supply cuts, a video conference could be held this week.

Saudi Arabia and Russia, two of the world’s largest oil producers, want to extend the daily 9.7 million barrels (bpd) production cut in July.

There may be a chance to achieve an agreement on the extension of production cuts to three months, but energy traders are skeptical of a cooperation beyond July.

The OPEC + meeting was expected to take place on June 4, but was delayed by some producers to poor compliance with commitments to cut supply.

Failure to extend the process of OPEC + means that the deduction could fall to 7.7 million bpd from July to December, as previously understood.

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