Oil pared an earlier increase in New York ahead of a high-stakes OPEC+ policy meeting, with producers debating whether to extend deep supply curbs or ease them.
West Texas Intermediate edged higher, but pared an earlier gain of as much as 2.5%. The OPEC+ meeting on Thursday will discuss whether to maintain the group’s current output cuts or resume a monthly schedule of modest and gradual production increases, according to a delegate.
On Wednesday an OPEC+ panel meeting ended without a policy recommendation, while the U.S. energy secretary called her Saudi counterpart to highlight the importance of “affordable energy.”
The group’s output plans come as a fresh lockdown in France stoked demand concerns. Still, positive signs from the U.S., as well as parts of Asia, highlight the complexity of the decision facing OPEC+ ministers later on Thursday.
While the rollout of coronavirus vaccines and supply curbs have underpinned a fourth quarterly gain for crude, the rebound has faltered in recent weeks on concern that near-term consumption is at risk, particularly in Europe. Mohammad Barkindo, secretary-general of the Organization of Petroleum Exporting Countries, pointed this week to the market’s recent volatility as “a reminder of the fragility facing economies and oil demand.”
“Sentiment is very negative right now, given all the demand concerns, and the most bullish case has probably been priced in,” Amrita Sen, chief oil analyst at Energy Aspects Ltd., said in a Bloomberg television interview.
WTI rose 0.5% to $59.47 a barrel at 7:41 a.m. New York time
Brent for June settlement was up 0.4% to $62.98
Data from the U.S. and Asia do bolster the case for OPEC+ to loosen the taps. Americans are driving and flying the most since the pandemic began, U.S. refineries are processing the most oil since early March last year, and the nation’s stockpiles have shrunk for the first time in six weeks.
In Asia, Japan’s large manufacturers have turned optimistic for the first time since the fall of 2019, while South Korea’s exports have risen the most in more than two years. Indian gasoline sales topped 2019 levels in March, though diesel sales were lower.
Elsewhere, however, the picture is weaker. In Europe, France’s four-week lockdown begins on Saturday, while Italy and Germany have extended partial shutdowns. The Canadian province of Ontario, home to Toronto and the capital Ottawa, will be locked down for 28 days, CBC News said. And in South America, Brazil detected a new Covid-19 variant as it again saw record deaths.