Crude Rises Amid Optimism Over OPEC Additional Supply By Investing.com

By Peter Nurse

Investing.com – Crude oil prices rose Thursday amid growing optimism that major producers will react cautiously when discussing a possible production increase.

At 9:15 AM ET (1415 GMT), futures were trading 1.8% higher at $ 62.38 a barrel, while the international benchmark contract was up 1.8% at $ 65.25.

US RBOB gasoline futures rose 0.8% to $ 1.9670 a gallon.

Members of the Organization of the Petroleum Exporting Countries, Russia and other oil producers must decide on Thursday whether to keep April production stable or increase it as they try to balance recent price increases with continued uncertainty about the economic recovery as the pandemic continues. of Covid-19.

Before the meeting, the general expectation was that the four-month rally in the price of oil futures from below $ 40 a barrel to currently above $ 60 would propel these producers, a group known as OPEC +, desperate. for additional income, to increase its agreed production. , maybe up to 1.5 million barrels per day.

However, before the start of the meeting, Saudi Arabia’s Energy Minister Prince Abdulaziz was quoted as saying the oil market has “improved” but urged caution, saying the group “should keep part dry. of their gunpowder. “

Similarly, Russia’s Deputy Prime Minister Alexander Novak said the oil market has not yet fully recovered even though we are “in much better shape,” with many uncertainties remaining.

These relatively cautious statements have led traders to have a positive view on the additional supply Thursday, with producers adding less than the originally expected 1.5 million barrels per day.

“We believe that the market could easily absorb this additional offer from April,” ING analysts said in a research note. “In fact, the market is likely to be able to manage even more easing, but it would probably be unwise for OPEC + to ease much more than the market expects, given the possible price impact of doing so.”

OPEC + ‘s focus on production has allowed market participants to scrutinize the rise in US crude on Wednesday, which jumped a record 21 million barrels last week, especially as this figure was influenced by the recent wave of weather. wintry in the southern states.

“Offsetting this large build were significant drops in refined product stocks, with the effects of the icy weather conditions we saw off the US Gulf Coast in February still showing up in the data,” added ING.