Brent crude futures were up $4.38, or 5.1%, at $89.52 a barrel as of 9:50 a.m. EDT (1350 GMT). U.S. West Texas Intermediate crude rose $4.79, or 6%, to $84.28.
Oil prices have fallen for four straight months since June as COVID-19 lockdowns in top energy consumer China hurt demand, while rising interest rates and rising US dollar weighed on global financial markets.
To support prices, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, are considering a production cut of more than 1 million bpd ahead of Wednesday’s meeting, said OPEC+ sources told Reuters.
That figure does not include additional voluntary cuts by individual members, an OPEC source added.
If agreed, it will be the group’s second consecutive monthly cut after cutting production by 100,000 bpd last month.
“After a year of tolerating extremely high prices, missed targets and very tight markets, the alliance (OPEC+) apparently does not hesitate to act quickly to support prices amid a deteriorating economic outlook.”
OPEC+ missed its production targets by nearly 3 million bpd in July, two sources from the producer group said, as sanctions imposed on some members and weak investment by others hampered its ability to increase production .
While fast Brent prices could strengthen further in the near term, concerns over a global recession should limit the upside, said consultancy FGE.
“If OPEC+ decides to cut production in the near term, the resulting increase in OPEC+ spare capacity will likely put more downward pressure on prices in the long term,” he said. said Friday in a note.
The dollar index fell for the fourth straight day on Monday after hitting its highest level in two decades. A cheaper dollar could boost demand for oil and support prices.
Brent crude futures were up $4.38, or 5.1%, at $89.52 a barrel as of 9:50 a.m. EDT (1350 GMT). U.S. West Texas Intermediate crude rose $4.79, or 6%, to $84.28.
Oil prices have fallen for four straight months since June as COVID-19 lockdowns in top energy consumer China hurt demand, while rising interest rates and rising US dollar weighed on global financial markets.
To support prices, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, are considering a production cut of more than 1 million bpd ahead of Wednesday’s meeting, said OPEC+ sources told Reuters.
That figure does not include additional voluntary cuts by individual members, an OPEC source added.
If agreed, it will be the group’s second consecutive monthly cut after cutting production by 100,000 bpd last month.
“After a year of tolerating extremely high prices, missed targets and very tight markets, the alliance (OPEC+) apparently does not hesitate to act quickly to support prices amid a deteriorating economic outlook.”
OPEC+ missed its production targets by nearly 3 million bpd in July, two sources from the producer group said, as sanctions imposed on some members and weak investment by others hampered its ability to increase production .
While fast Brent prices could strengthen further in the near term, concerns over a global recession should limit the upside, said consultancy FGE.
“If OPEC+ decides to cut production in the near term, the resulting increase in OPEC+ spare capacity will likely put more downward pressure on prices in the long term,” he said. said Friday in a note.
The dollar index fell for the fourth straight day on Monday after hitting its highest level in two decades. A cheaper dollar could boost demand for oil and support prices.