Oil futures again rose on Tuesday, potentially heading for a fifth day of gains, amid optimism that Organization of Petroleum Exporting Countries, OPEC, and other countries may agree to extend production cuts in a bid to support prices.
Brent was up 42 cents, or 0.7 per cent at $63.01 a barrel, while U.S. crude was 46 cents, or 0.8 per cent, higher at $58.31 a barrel.
The U.S. oil gained more than 2 per cent on Monday, while Brent finished the day 1.7 per cent higher as the market reacted to the appointment by Saudi Arabia’s king of his son, Prince Abdulaziz bin Salman, as energy minister on Sunday.
Prince Abdulaziz, a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries (OPEC), said the pillars of Saudi Arabia’s policy would not change and a global deal to cut oil production by 1.2 million barrels per day would be maintained.
He added that the so-called OPEC+ alliance between the OPEC and non-member countries including Russia would be in place for the long term.
A meeting of OPEC and OPEC+ countries this week in Abu Dhabi this week “is stirring up hopes for additional supply cuts,” said Stephen Innes, Asia Pacific market strategist at AxiTrader.
Still, Russia’s oil output in August exceeded its quota under the OPEC+ agreements.
Should oil end Tuesday higher it will be the longest run of gains since late July but headwinds remain as the U.S.-China trade war rumbles on.
Executives at the annual Asia Pacific Petroleum Conference said on Monday they expect oil prices this year to be pressured by uncertainties surrounding the global economy, the U.S.-China trade war and increasing U.S. supplies.