Oil prices rose slightly in early Asian trade on Tuesday, hoping that OPEC+ may agree to a significant cut in crude supply when it meets on Wednesday, but worries about the global economy restricted gains.
Brent crude futures were up 43 cents, or 0.5%, to $89.29 a barrel, following a more than 4% rise the previous session.
Crude futures in the United States increased 22 cents, or 0.3%, to $83.85 per barrel. The benchmark increased by more than 5% in the prior session, marking its most significant daily rise since May.
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On Monday, oil prices rose on renewed supply fears. On Wednesday, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, are expected to cut output by more than 1 million barrels per day (BPD) during their first in-person meeting since 2020.
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OPEC+ has increased output this year after placing record cuts in 2020 owing to demand devastation led by the COVID-19 pandemic. However, in recent months, the group has failed to reach its targeted output increases, falling short by 2.9 million BPD in July.
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The production decrease was justified by the significant drop in crude prices from a recent peak, according to Goldman Sachs, who added that this bolstered its bullish oil stance.
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Oil prices have fallen for four months in a row as COVID-19 lockdowns in top oil importer China dampened demand, while interest rate hikes and a strengthening US currency weighed on global financial markets. The world’s major central banks have begun the most aggressive cycle of interest rate hikes in decades, raising concerns about a global recession.
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A Reuters poll on Monday indicated that crude oil stockpiles in the United States climbed by roughly 2 million barrels in the week ended September 30.
