Oil holds gains as market speculates on upcoming OPEC+ meeting

Oil held onto gains as market uncertainty over OPEC’s upcoming decision on production tugged the price in opposite directions.

West Texas Intermediate rose 1.2 per cent to settle above US$78 Tuesday, after trading in a US$3 range. Volatility was expected to rise in the days leading up to the meeting this weekend as traders search for any clue on how OPEC and its allies will respond to deteriorating market conditions for producers. The shape of the futures curve has flipped in recent weeks, signaling an oversupplied market. 

OPEC+ does “not like contango and that is what has raised market expectations of deeper cuts,” Amrita Sen, chief oil analyst at consultant Energy Aspects, said in a Bloomberg TV interview. “I’m not ruling out deeper cuts -- that’s of course on the table -- but I would say that’s not our base case.”