Oil prices climb before OPEC+ policy meeting to decide output policy
Oil prices rose on Wednesday before an OPEC+ meeting in which the producer club is expected to stick to a plan to add 400,000 barrels per day (bpd) each month through to December.
The Organization of the Petroleum Exporting Countries, Russia and allies, a group known as OPEC+, is set to meet at 1500 GMT. It raised its forecast for oil demand next year, OPEC+ sources said, a move that might help build a case for raising output.
Brent crude for November delivery gained 36 cents, or 0.5 percent, to touch $71.99 a barrel by 0850 GMT. U.S. West Texas Intermediate (WTI) crude for October was at $68.81 a barrel, up 31 cents, or 0.5 percent.
US President Joe Biden’s administration has urged OPEC+ to boost output to tackle rising gasoline prices that it views as a threat to the global economic recovery.
“One foregone conclusion is that they will not add additional barrels as per Washington’s recent request. Nor will they press the pause button on easing supply curbs,” said Stephen Brennock of oil broker PVM.
“There is no reason to think (OPEC+) will rock the boat when it comes to its production strategy,” he said.
Also supporting prices, a US industry report showed crude inventories fell more than expected last week, steadying after overnight losses caused by Hurricane Ida on US refineries.
US crude stocks fell by 4 million barrels for the week ended Aug. 27, according to two market sources, citing American Petroleum Institute (API) figures on Tuesday.
Ahead of the weekly Energy Information Administration report due at 10:30 a.m. EDT (1430 GMT) on Wednesday, a Reuters poll of analysts estimated crude stocks would drop 3.1 million barrels.
But US crude prices are expected to remain under pressure as offshore oil and gas production in the Gulf of Mexico gradually recovers, although refinery operations will likely take longer to return to normal, analysts say.