Oil steady before OPEC+ talks on supply amid economic recovery

NEW YORK: Oil prices held steady on Tuesday before this week’s OPEC+ meeting, with producers expected to ease supply curbs as economies start to recover from the coronavirus crisis.

OPEC Secretary General Mohammad Barkindo said the outlook for oil demand was looking more positive, particularly in Asia.

Brent futures rose 2 cents to $63.71 a barrel by 10:48 a.m. EST (1548 GMT). U.S. West Texas Intermediate (WTI) crude rose 7 cents, or 0.1%, to $60.71.

During the session, both Brent and WTI fell over $1 a barrel to one-week lows. Last week, both touched their highest since January 2020. The rally faded on expectations the Organization of the Petroleum Exporting Countries and allies in the group known as OPEC+ would produce more oil from April, easing last year’s deep supply cuts.

“Crude prices are steadying ahead of Thursday’s pivotal OPEC+ meeting,” said Edward Moya, senior market analyst at OANDA in New York. “The energy market is bracing for more supply … but continued vaccine optimism and global reopening hopes will likely limit most of the downward pressure with oil prices.”

OPEC+, which meets on Thursday, could discuss allowing as much as 1.5 million barrels per day (bpd) back into the market.

Abu Dhabi’s ADNOC has told Asian oil buyers it plans to increase crude allocations in April, sources close to the matter told Reuters ahead of the OPEC+ meeting.

OPEC oil output fell in February as a voluntary cut by Saudi Arabia added to reductions in a previous OPEC+ pact, a Reuters survey found, ending a run of seven consecutive monthly increases.

Russia failed to raise oil output in February despite being granted permission by OPEC+ as industry sources said harsh winter weather hindered work.

In Europe, Germany said it will start easing some coronavirus restrictions from next week.

In Asia, China’s factory activity growth slipped to a nine-month low in February, which could curtail crude demand in the world’s top importer.

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