Oil prices crept higher today as the possibility that OPEC+ will extend or deepen supply cuts was compounded by a storm-related drop in Kazakh oil output to send the Brent benchmark above $80 a barrel.
Brent crude futures were up 73 cents, or nearly 1%, at $80.71 a barrel by 1506 GMT. US West Texas Intermediate (WTI) crude gained 74 cents, or roughly 1%, to $75.60.
OPEC+, comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, is due to hold an online ministerial meeting on Thursday to discussproduction targets for 2024.
The talks on 2024 oil policy are difficult, making a rollover of the previous agreement a possibility rather than deeper production cuts, four OPEC+ sources said on Tuesday.
“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.
The market tumbled last week when OPEC+ pushed back the original date for its meeting to iron out differences on production targets for African producers.
One possible compromise could involve Angola and Nigeria accepting their reduced production targets for a few months if targets for the other countries were likewise lowered, said Commerzbank’s Carsten Fritsch.
“According to delegates, Saudi Arabia is demanding lower production quotas from the other OPEC+ countries. While Kuwait has signalled that it would be willing to do so, some countries are apparently resisting any such move.”
The United Arab Emirates is likely to oppose this, given that its 2024 production target was increased at its urging when OPEC+ held its previous meeting in early June, he added.
Oil also found support from a weak dollar, an expected decline in U.S. crude inventories and the drop in Kazakh output.
Kazakhstan’s largest oilfields have cut their combined daily oil output by 56%.
Four analysts polled by Reuters estimated that the latest round of weekly US supply reports will show crude inventories fell by about 2 million barrels.
The first of this week’s two reports is due at 2130 GMT from the American Petroleum Institute.