Oil prices gain ahead of OPEC+ meeting on output policy

Pump jacks operate at an oil extraction site (Reuters)

SULAIMANI (ESTA) — Oil prices gained on Thursday on expectations that a meeting of OPEC and its allies including Russia would yield output constraint in the face of resurgent coronavirus infections in some regions.

Brent crude for June delivery was up by 67 cents at $63.41 a barrel by 0639 GMT after falling 2.2% overnight. U.S. oil was up 67 cents at $59.83 a barrel, having dropped 2.3% on Wednesday.

Ministers from and OPEC and its allies, a group called OPEC+, meet later on Thursday to consider options that include an output roll-over and gradual output increase, Reuters reported.

“The most likely outcome of the … meeting is no significant changes in production,” Eurasia Group said in a report on the gathering, according to Reuters.

“The caution on display in the OPEC+ discussions signals that any decisions on tapering will likely be delayed to the May meeting,” Eurasia said, referring to the gradual supply of withheld production to the market.

OPEC+ is currently curbing output by just over 7 million bpd to support prices and reduce oversupply. Saudi Arabia has added to those cuts with a further 1 million bpd.

The cuts came after the novel coronavirus outbreak turned into the biggest global health crisis in a century and led to the evisceration of demand for oil and fuel.

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