Oil prices have improved ahead of today’s Organisation of the Petroleum Exporting Countries (OPEC) meeting, where the members are expected to agree to an extension of the ongoing supply-cut deal to tighten the market.
Brent crude oil futures for February traded 31¢ higher at $62.84 a barrel, while the US West Texas Intermediate (WTI) crude futures gained 20¢ to reach $57.50 per barrel, reported Reuters.
Trading volumes in the market were noted to be timid before the OPEC meeting, which is scheduled to take place in Vienna.
OPEC members, along with key deal participant Russia, are expected to support the extension of the agreement to curb the production of crude oil.
The deal originally came into effect in January and is set to expire in March next year.
Strong Petroleum crude trading managing director Oystein Berentsen was quoted by the news agency as saying: “If OPEC extends without any caveats, then price may slowly edge higher.”
The possible extension may include plans for a review in June next year if strong demand and ongoing supply curbs overheat the market.
However, rising production rates in the US are said to have undermined the oil cartel’s efforts to rebalance the market.
US oil production stood at 9.68 million barrels per day (bpd) last week, bringing its output closer to the levels of top producers Russia and Saudi Arabia.
Additionally, the Energy Information Administration reported that US crude stockpiles fell by 3.4 million last week to a total of 453.7 million barrels, while gasoline and distillate inventories increased at a greater rate than expected.