LONDON: Oil prices were up slightly on Thursday ahead of an OPEC+ meeting later in the day, with investors waiting to see what the producer group would do next on supply cuts while also monitoring geopolitical tension in the Middle East.
Brent crude futures rose 39 cents, or 0.5 Percent , to $72.70 a barrel by 0944 GMT, while U.S. crude futures were at $68.97 a barrel, up 43 cents, or 0.6 Percent .
Both benchmarks fell nearly 2 Percent on Wednesday. A single bank sold a large volume of U.S. oil futures contracts in early afternoon trading on Wednesday, a person with direct knowledge of the matter said, pushing prices down.
The Organization of the Petroleum Exporting Countries and its allies in OPEC+ are likely to extend their latest round of oil output cuts by at least three months from January in an online meeting at 1100 GMT on Thursday, OPEC+ sources told Reuters, providing additional support for the oil market.
OPEC+ has been looking to phase out supply cuts through next year but has so far delayed taking action due to weaker-than-expected global demand, especially from China.
“Market participants are closely watching to see if OPEC+ will focus on bolstering prices by extending production cuts, or opt to defend its share of the global crude oil market by easing those cuts,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
“The OPEC+ decision may prompt a short-term reaction, but the oil market is likely to rise by year-end on expectations of a U.S. economic recovery under the Trump administration and ongoing Middle East tensions,” he said.
For now, the uncertainty kept prices from recovering.
“As the production decision from OPEC+ awaits, there may be some de-risking as some investors price for the scenario that OPEC+ may disappoint,” said Yeap Jun Rong, market strategist at IG.
“I think it has become somewhat clear that OPEC+ hands are tied, and with a potential increase in oil production from a Trump Administration coming 2025, their aim to prop up prices may be more challenging,” Yeap said.
A larger-than-expected draw in U.S. crude stockpiles last week also provided some support to prices.
In the Middle East, Israel said on Tuesday it would return to war with Hezbollah if their truce collapses and its attacks would go deeper into Lebanon and target the state itself.
Meanwhile, Donald Trump’s Middle East envoy has travelled to Qatar and Israel to kick-start the U.S. President-elect’s diplomatic push to help reach a Gaza ceasefire and hostage release deal before he takes office on Jan. 20, a source briefed on the talks told Reuters.
