NEW YORK: Oil futures rose about 2 percent on Tuesday as traders worried that this week’s meeting of OPEC+ producers may not lead to a further boost in crude supply.
The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, meet on Wednesday. Two of eight sources said a modest output hike would be discussed. The rest said a boost was unlikely.
OPEC+ trimmed its forecast for an oil market surplus this year by 200,000 barrels per day to 800,000 bpd, three delegates told Reuters.
Brent futures rose $1.65, or 1.7 percent, to $101.68 a barrel by 12:25 p.m. EDT (1625 GMT).US West Texas Intermediate crude rose $1.60, or 1.7 percent, to $95.49.
Russia’s invasion of Ukraine in February fed worries about global oil supply and sent prices soaring. In March, Brent jumped close to its all time high of $147.50 a barrel. But with central banks raising interest rates to fight inflation, worries about slowing growth have eclipsed tight supply.
Surveys showed factories across the US, Europe and Asia struggled for momentum in July as flagging global demand and China’s strict COVID-19 restrictions slowed production.
“These readings did nothing to mitigate the fears of recession,” said Tamas Varga at oil broker PVM.
Casting a cloud over the market are worries that US Speaker of the House Nancy Pelosi’s visit to Taiwan will escalate tensions between the US and China. Stocks slipped and bond yields fell on worries about the visit.
Also supporting crude prices, analysts polled by Reuters forecast US crude inventories fell by 500,000 barrels last week.