Oil prices rose on Tuesday amid expectations that the OPEC+ group may agree to a significant reduction in crude oil production when it meets this week.
Brent crude futures rose 79 cents, or 0.9 percent, to $89.65 a barrel by 10:54 GMT after rising more than 4 percent in the previous session. US oil futures also rose 60 cents, or 0.7 percent, to $84.23 a barrel. In the previous session, it rose by more than five percent.
Oil prices rose on Monday amid renewed concerns about a lack of supply. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, are expected to cut production by more than 1 million barrels a day at their first in-person meeting since 2020 on Wednesday.
OPEC sources said voluntary cuts by members could be added to this, making it the biggest cut since the start of the COVID-19 pandemic.
“Despite everything that is happening with the war in Ukraine, OPEC+ has never been this strong and will do everything possible to provide price support,” Edward Moya, senior analyst at OANDA, said in a note.
OPEC+ has increased production this year after a record cut in 2020 due to falling demand caused by the coronavirus pandemic. But the organization has failed over the past few months to meet its planned 2.9 million barrels per day increase in production, which it missed in July.
Oil prices have been falling for four straight months as the COVID-19 shutdown in China, the world’s largest oil importer, curtailed demand, while higher interest rates and a stronger dollar weighed on global financial markets.