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Investing.com -- Oil prices edged higher Tuesday as traders await this week’s delayed OPEC+ meeting, hopeful of the extension or even deepening of ongoing production cuts.
By 08:55 ET (13.55 GMT), the U.S. crude futures traded 0.5% higher at $75.24 a barrel and the Brent contract climbed 0.5% to $80.23 a barrel.
OPEC+ to agree to output cuts?
The Organization of the Petroleum Exporting Countries and allies, including Russia, a group known as OPEC+, is due to meet remotely on Thursday to discuss output levels going into 2024.
The meeting was originally scheduled for Sunday but was postponed, causing a sharp selloff at the end of last week, reportedly after a number of African countries complained about their lower 2024 production targets.
However, reports suggest the group has moved towards a compromise, with the lower prices seemingly sharpening minds, and traders appear confident the group’s top two producers, Saudi Arabia and Russia, will agree to continuing curbing supply next year.
“The extension of additional voluntary cuts from Saudi Arabia should erase most of the surplus expected in 1Q24,” said analysts at ING, in a note. “However, if OPEC+ want to provide more solid support to the market and ensure that we do not see stocks building early next year, they will need to agree on deeper and broader cuts.”
U.S. stockpiles seen falling
There has been a sharp decline in oil prices over the last month, due to concerns that the market was oversupplied, largely based on strong production by non-OPEC countries such as the United States.
The market received some support Tuesday with the news that Kazakhstan's largest oilfields have cut their combined daily oil output by 56%.
However, more attention is likely to be paid to the latest round of weekly U.S. supply reports, starting later in the session with numbers from the American Petroleum Institute.
The industry body is expected to report a small drop in crude inventories, but this follows a substantially bigger-than-expected increase last week, which was the fourth straight week of builds.
Chinese PMIs in focus
Oil markets were also awaiting a string of key economic readings this week, or which the most pertinent to oil markets are upcoming pmi from China, which are expected to provide more cues on business activity in the world’s largest oil importer.
U.S. PMIs for November are also due this week, and are expected to show further weakening in business activity, while a revised reading on third-quarter GDP is also on tap.
(Ambar Warrick contributed to this article.)
