Oil prices closed marginally up yesterday as investors took heart from lower US inventories ahead of today’s OPEC+ meeting on whether to ease supply cuts for the next six months.
While oil producers pondered the effect of increasing or maintaining current supply levels, investors chewed their fingernails and took small bites at various commodity offerings.
Small uplift ahead of OPEC+ decision
Brent Crude contracts for September were trading at $75.13, up 0.49% or 37¢, while US benchmark producer West Texas Intermediate Crude price for August had nudged up 19¢ to $73.66, a 0.26%, at 02:00 EDT (05:00 UTC).
Brent Crude Futures, the European benchmark oil price, continued its slow climb, reaching $74.77 overnight, a 0.20% or 15¢ gain.
The rise and rise of oil
Concerns of further possible lockdowns following the rise in COVID-19 Delta cases are likely to be raised at the meeting.
A new wave could dampen fuel demand in the US and elsewhere. Rising costs following global lockdowns have also hampered production in Asian factories, where tough restrictions and access to raw materials slowed output.
Brent Crude recorded a rise of around 8% in June, while West Texas topped that, hitting the 10% mark.
OPEC+ decision time
OPEC+ recently signed off on easing supply cuts, increasing output by 2.1 million barrels per day for the period May to July. Whether the group decides to maintain current production levels or boost them further is up for debate.
According to a report on Reuters, ANZ analysts said in a note that “Sideline discussions indicate that Russia is proposing to boost supply while Saudi Arabia wants a more cautious approach.”