Oil prices gain nearly 2% on expectations of deeper OPEC+ cuts

An oil and gas industry worker walks during operations of a drilling rig at Zhetybay field in the Mangystau region, Kazakhstan, Nov 13, 2023. REUTERS/Turar Kazangapov/File photo

BENGALURU  – Oil prices rose more than $1 a barrel on Wednesday as investors focused their attention on expectations of fresh supply cuts from OPEC+ and looked past a jump in U.S. crude, gasoline and distillate stockpiles.

Brent crude futures advanced by $1.42 percent, or 1.7, to settle at $83.10 a barrel, while U.S. West Texas Intermediate (WTI) crude futures gained $1.45, or 1.9 percent, to settle at $77.86 a barrel.

Oil markets have found support from hopes of some form of a price-supportive resolution from the OPEC+ group, Kpler analyst Matt Smith said.

Members of OPEC+, which includes the Organization of Petroleum Exporting Countries and its allies such as Russia, are due to hold a policy meeting on Thursday. Talks ahead of the meeting were focusing on additional cuts, although details were yet to be agreed, sources close to the group told Reuters.

Another media report earlier said that the cut could be of as much as 1 million barrels a day.

“All eyes are on the Nov. 30 OPEC meeting, and the fine details will matter,” CFRA analyst Stewart Glickman said.

The Energy Information Administration reported a surprise build in U.S. crude oil and distillate fuel stocks last week, indicating weak demand. Gasoline stocks also rose by more than expected, the data showed.

However, the impact of those builds was neutralized by large draws in other refined products, like residual fuel oil, UBS analyst Giovanni Staunovo said.

A severe storm in the Black Sea region has disrupted up to 2 million bpd of oil exports from Kazakhstan and Russia, according to state officials and port agent data, raising the prospect of short-term supply tightness.

Kazakhstan’s largest oilfields are cutting combined daily oil output by 56 percent from Nov. 27, the Kazakh energy ministry said.