Oil prices rose in Asian trade on Tuesday as media reports suggested that OPEC+ planned to extend or even deepen its ongoing production cuts at a meeting later this week.
Anticipation of a swathe of economic readings due this week also kept traders largely on the sidelines, limiting any major gains.
Reuters reported that the Organization of Petroleum Exporting Countries and Allies (OPEC+) intended to collectively reduce output at a meeting this Thursday, as concerns over sluggish demand saw oil prices once again struggling to hold above $80 a barrel.
A delay in the upcoming OPEC+ meeting- to Nov. 30 from Nov. 26- had also dented oil prices, especially as reports suggested the delay was due to disagreements over output reductions between member states.
Brent oil futures rose 0.3% to $80.20 a barrel, while West Texas Intermediate crude futures rose 0.5% to $75.20 a barrel by 20:39 ET (01:39 GMT). Both contracts were nursing five straight weeks of losses.
OPEC+ production cuts squarely in focus
Saudi Arabia and Russia led OPEC+ in cutting production over the past year, as fears of worsening global demand pulled down prices. Saudi Arabia- the de-facto leader of OPEC+, had also attributed the decline to speculators betting against oil markets.
The two countries are now expected to extend or even deepen their ongoing supply cuts into early 2024 – a scenario that analysts say will tighten markets and boost prices. Saudi Arabia has largely attempted to keep Brent oil trading in the range of $80 to $90 a barrel.
But prices have struggled to maintain the range, as record-high U.S. production, surging Chinese stockpiles and increased output from some OPEC states spurred bets that oil markets were not as tight as initially expected.
Losses were also driven by weak economic readings from several major oil-importing nations- particularly China, which drummed up fears of slowing demand.
Beyond the OPEC+ meeting, markets were also awaiting a string of key economic readings this week.
Inflation and PMI figures on tap
Eurozone inflation data is due on Thursday, as is the reading on U.S. PCE prices – which is the preferred inflation gauge of the Federal Reserve.
More pertinent to oil markets are upcoming purchasing managers index readings from China, which are expected to provide more cues on business activity in the world’s largest oil importer. The readings for November will be in close focus after a swathe of weak figures for October.
U.S. PMIs for November are also due this week and are expected to show further weakening in business activity, while a revised reading of third-quarter GDP is also on tap.
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