Business

Oil edges upper forward of OPEC+ resolution on crude output

Oil futures edged higher Thursday, finding support ahead of a decision by the Organization of the Petroleum Exporting Countries and its allies on how to adjust existing output curbs beginning next month.

West Texas Intermediate crude for May delivery
CL.1,
+0.54%

CLK21,
+0.54%

rose 19.337 cents, or 0.3%, to $59.33 a barrel on the New York Mercantile Exchange. June Brent crude
BRN00,
+0.54%

BRNM21,
+0.54%
,
the global benchmark, was up 19 cents, or 0.3%, at $62.93 a barrel on ICE Futures Europe.

“Thanks to the fresh round of virus infections across some important regions of the world and the extension of lockdowns in part of Europe, it looks like the only options are a rollover of existing cuts in May and followed by a gradual increase in production thereafter,” said Fawad Razaqzada, analyst at ThinkMarkets, in a note. “This outcome is likely to have been priced in.”

There is an outside chance OPEC+ could agree to allow production to rise, which would come as a surprise to the market and would likely trigger selling even if the increase is small.

“So, whichever way you look at it, the risks are skewed to the downside, as a rollover is expected” he said.

U.S. Energy Secretary Jennifer Granholm late Wednesday tweeted that she had talked with Saudi Energy Minister Abdulaziz bin Salman al-Saud and had “reaffirmed the importance of international cooperation to ensure affordable and reliable sources of energy for consumers.”

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