Oil rises with OPEC+ seen considering cuts amid faltering market
BNN Bloomberg
Oil climbed to an intraday high with OPEC and its allies expected to consider deeper production cuts when they meet this weekend.
West Texas Intermediate rose as much as 2.1 per cent to an intraday high of US$77.84, reversing course after futures earlier dropped to the lowest since 2021. Protests over harsh anti-COVID measures erupted across the world’s largest crude importer over the weekend, spurring a broad selloff in commodities as the week opened.
The nearest portion of the Brent and WTI futures curves flipped into contango -- a bearish structure indicating oversupply -- with physical markets also under pressure. Speculators markedly reduced bullish bets, posting the sixth-largest reduction in net-long positions on record for Brent last week.
OPEC+ will meet Sunday to decide on its next output level, while European Union nations negotiate plans for a price cap on Russian crude. The market’s weak structure is likely to be a source of concern for OPEC as it heads into the meeting, with conditions seemingly ripe for another output cut, said Eurasia Group.
