Oil prices have edged up on expectations that the Organization of the Petroleum Exporting Countries (OPEC) may deepen cuts at its meeting to be held this week.
Brent crude futures increased $0.76 at $61.25 a barrel, while West Texas Intermediate (WTI) futures rose $0.91 to $56.08 a barrel, reported Reuters.
OPEC’s output cuts indicated that supply may tighten next year.
Oil prices also received support as signs of rising manufacturing activity in China directed towards the increase in fuel demand.
Due to rising domestic demand on measures of government stimulus, factory activity in the country increased last month for the first time in seven months.
AxiTrader Asia chief market strategist Stephen Innes was quoted by the news agency as saying: “At the open, prices remain supported by the surprising resilient China factory activity with the forward-looking PMI’s beating expectations.”
Iraq’s comments that the OPEC and allied producers will consider deepening output cuts by around 400,000 barrels per day (bpd) to 1.6Mbpd also offered support to oil prices.
This week, OPEC+ group is expected to extend existing output cuts until next June as part of its meet, which will be held in Vienna.
Under the current deal, the group agreed to cut supply by 1.2Mbpd from January this year until March next year.
ING Economics said in a note that the ministers will not take any action on the supply, extend the cuts without change, or deepen them further.
ING added: “We believe that only the final scenario would be constructive for oil prices.”
Last month, OPEC pumped nearly 29.57Mbpd, down 110,000bpd from October’s revised figure, according to a survey by Reuters.