Oil rebounds with OPEC+ expected to confirm swingeing output cuts
Oil prices climbed more than $3 this morning, with investors expecting the biggest cut to oil output this week since the start of the pandemic.
Brent Crude prices climbed 4.04 per cent to $88.58 per barrel, while WTI Crude rose 4.23 per cent to $82.85.
OPEC and its allies including Russia, known as OPEC+, are set to meet later this week, and are currently weighing up production cuts of more than one million barrels per day (bpd).
The cartel is aiming to bolster prices, which have slipped amid reduced expectations for demand this year.
Prices have tumbled for four straight months following persist Covid-19 restrictions in China, surging interest rates, a rebounding US dollar and fears of a global recession.
This has seen oil drop from around $120 per barrel in June to less than $90 this month.
If agreed, it will be the group’s second consecutive monthly cut after reducing output by 100,000 bpd last month.
The reductions in output does does not include additional voluntary cuts by individual members, with multiple members failing to reach modest increases in production targets this year.
For instance, OPEC+ missed its production targets by nearly 3 million bpd in July, according to news agency Reuters, as sanctions on some members and low investment by others limited its ability to raise output.
The group is meeting on Wednesday in Vienna, Austria, to confirm the cuts.
This will be its first in-person meeting since the pandemic.