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Oil prices hold ground ahead of OPEC+ meeting on extended output cuts

Published 06/02/2020, 08:36 AM
Updated 06/02/2020, 08:40 AM
© Reuters.
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By Sonali Paul
MELBOURNE, June 2 (Reuters) - Oil prices rose in early trade
on Tuesday, with traders waiting to see whether major crude
producers agree to extend their huge output cuts to shore up
prices at a meeting expected later this week.
Brent crude LCOc1 futures rose 0.3%, or 12 cents, to
$38.44 a barrel as of 0011 GMT.
U.S. West Texas Intermediate (WTI) crude CLc1 futures
traded in a 38 cent range on either side of Monday's close, and
last traded up 0.3%, or 9 cents, at $35.53 a barrel.
Brent prices have doubled over the past six weeks, thanks to
supply cuts by the Organization of the Petroleum Exporting
Countries and allies, including Russia, dubbed OPEC+. However,
prices are still down about 40% for the year so far.
OPEC+ producers are considering extending their production
cut of 9.7 million barrels per day (bpd), or about 10% of global
output, into July or August, at an online meeting likely on June
4, which has helped prop up prices this week. "So long as the current OPEC+ compliance commitment argument
for price recovery holds water, oil prices could stabilise at
higher ranges," said Stephen Innes, chief global market
strategist at AxiCorp.
Under the OPEC+ plan agreed in April, the record supply cut
was to be for May and June, scaling back to a cut of 7.7 million
bpd from July through December. Saudi Arabia has led talks
pushing to extend the heftier cuts.
A drop in crude stockpiles at Cushing, Oklahoma, which fell
to 54.3 million barrels in the week to May 29, also buoyed
prices, traders said, citing a Genscape report on Monday.
However trade tension between China and the United States
over Beijing's security clampdown in Hong Kong, as well as
manufacturing data on Monday showing Asian and European
factories struggling, kept a lid on gains.


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