Oil prices rise as OPEC+ meeting approaches

Crude oil prices rose earlier in the day ahead of Sunday's OPEC+ meeting, with most analysts expecting the group to keep production cuts of around 2.2 million barrels in place per day during the second semester.

Brent crude climbed above $84 a barrel earlier in the day and West Texas Intermediate added more than $1 to hit $80 a barrel, with analysts saying OPEC+'s continued control of production would help balance a seemingly surplus market.

“In addition, the onset of the summer season in the United States leads to a seasonal rise in consumption and generally contributes to positive dynamics in crude oil prices,” Sugandha Sachdeva of India-based consultancy SS WealthStreet told Reuters .

Early travel numbers for Memorial Day weekend are in, and they appear optimistic in terms of pricing.

“Early data suggests that a relatively high number of U.S. holiday trips were made over the Memorial Day holiday, the traditional start of the road season. Air travel was also strong,” the analysts said of ANZ in a note cited by Reuters.

Meanwhile, ING's Warren Patterson and Ewa Manthey noted a production disruption at the Buzzard field in the UK's North Sea, as reported by operator CNOOC this week. The Buzzard field is the largest source of Forties crude which is part of the Brent crude benchmark. Its production capacity is 80,000 barrels per day.

Commenting on Sunday's OPEC+ meeting, Patterson and Manthey wrote that “members should fully roll over their additional voluntary cuts.” High expectations of a full rollover mean OPEC+ must ensure it does not disappoint the market, or risk an aggressive pullback in prices. »

Among other factors pushing oil prices higher, ING analysts noted the latest reports of a Houthi attack on a ship in the Red Sea and the war between Israel and Hamas.

By Irina Slav for Oilprice.com

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