Oil prices jump ahead of OPEC+ meeting to discuss supply cuts

Oil prices jump ahead of OPEC+ meeting to discuss supply cuts

New York: Oil prices rose by about $3 a barrel on Tuesday on expectations of a large cut in crude output from the OPEC+ producer group, and support from a weaker US dollar. The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, look set to cut output when they meet on Wednesday. The move would squeeze supply in an oil market that energy company executives and analysts say is already tight due to healthy demand, a lack of investment and supply problems. Sources from the group have said that OPEC+, which includes Russia, is discussing output cuts in excess of 1 million barrels per day (bpd). Oil extended gains after Bloomberg reported that OPEC+ was considering a 2 million bpd cut. “We expect a substantial cut to be made, which will not only help to tighten the physical fundamentals but sends an important signal to the market,” Fitch Solutions said in a note. Kuwait’s oil minister said OPEC+ would make a suitable decision to guarantee energy supply and to serve the interests of producers and consumers. OPEC+ has boosted output this year after record cuts put in place in 2020 when the pandemic slashed demand.