Oil was up Wednesday morning in Asia, cutting back losses from the previous session ahead of an Organization of the Petroleum Exporting Countries and partners (OPEC+) meeting to arrange production levels for May.
Brent oil futures were up 0.55% to $64.52 by 12:52 PM ET (4:52 AM GMT) and WTI futures increased 0.59% to $60.91.
Investors are mainly betting that OPEC+ affiliates will consent to continue their supply curbs into May when they convene on Apr. 1.
Commonwealth Bank commodities analyst Vivek Dhar informed Reuters that the expectation is OPEC+ will confirm supply discipline, so that’s turning the market.
Saudi Arabia, the second-largest oil producer globally, is also reportedly provided to back an extension of the supply cuts into June, including its deliberate amount.
OPEC+ in February increased its cut of just over 7 million barrels per day (BPD) of supply, a shock move at a time when fuel demand seemed to be improving. While Saudi Arabia made an additional voluntary cut of 1 million BPD, Russia and Kazakhstan were given small exemptions.
The Traders Expectations on OPEC+ meeting
The OPEC+ meeting comes following a month of whipsawing oil prices as increasing coronavirus cases pointed to restrictive measures being contracted and expanded fuel demand recovery worries.
Europe is currently dealing with the third wave of problems and a slow vaccine rollout, with numbers increasing in India and Brazil. Investors are pitting this information versus the U.S.’s more optimistic growth outlook, where the vaccination program has been improving quicker.
Dhar replied that the reason is even less so to add supply given what’s happened after then. So they think OPEC+ will maintain that order in their meeting.
Continuing to argue that the cartel should hold back supply, U.S. crude oil supply data from the American Petroleum Institute announced a build of 3.91 million barrels for the week closing Mar. 26. Estimates prepared by Investing.com foretold a 400,000-barrel build, while a 2.927-million-barrel build was written for the previous week.
Supply data from the U.S. Energy Information Administration is expected later in the day.