Oil prices have increased ahead of the Organization of the Petroleum Exporting Countries (OPEC) meeting to be held this week in Vienna on extending production curbs to support the market.
Brent crude futures rose $0.44 at $61.26 a barrel, while US West Texas Intermediate (WTI) crude futures increased by $0.38 cents at $56.48 a barrel, reported Reuters.
According to Iraq, the OPEC and its allies, known as OPEC+, are planning to deepen the existing supply cut of 1.2 million barrels per day (Mbpd) by a further 400,000bpd.
The group, which has been curbing supply since 2017, is expected to maintain the cuts in order to balance high production in the US.
Reuters quoted Iraq oil minister Thamer Ghadhban as saying: “A deeper cut is being preferred by a number of key members”.
AxiTrader chief Asia market strategist Stephen Innes said: “Amid (the) trade war uncertainty, OPEC will be even more determined to maintain a floor on oil prices and will work to deliver precisely that outcome.”
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Oil prices further gained support from data released by the American Petroleum Institute (API), which highlighted a 3.7 million barrels decline in US crude stockpiles last week.
However, stocks of gasoline and distillate witnessed an increase.
Meanwhile, investors are awaiting crude draw information from the US Department of Energy’s Energy Information Administration (EIA) later today.
US President Donald Trump said that an agreement to end the trade dispute between the two biggest economies may be further delayed until the American presidential election in November 2020.
The war between the US and China has weakened the economy worldwide, holding back oil demand growth.