Oil rises on hopes of extended OPEC production cuts
Brent was up 42 cents, or 0.7%, at $63.01 a barrel by 0104 GMT, while U.S. crude was 46 cents, or 0.8%, higher at $58.31 a barrel.
U.S. oil gained more than 2% on Monday, while Brent finished the day 1.7% higher as the market reacted to the appointment by Saudi Arabia’s king of his son, Prince Abdulaziz bin Salman, as energy minister on Sunday.
Prince Abdulaziz, a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries (OPEC), said the pillars of Saudi Arabia’s policy would not change and a global deal to cut oil production by 1.2 million barrels per day would be maintained.
He added that the so-called OPEC+ alliance between the OPEC and non-member countries including Russia would be in place for the long term, informs Reuters.
A meeting of OPEC and OPEC+ countries this week in Abu Dhabi this week “is stirring up hopes for additional supply cuts,” said Stephen Innes, Asia Pacific market strategist at AxiTrader.
Still, Russia’s oil output in August exceeded its quota under the OPEC+ agreements.
Should oil end Tuesday higher it will be the longest run of gains since late July but headwinds remain as the U.S.-China trade war rumbles on.
Executives at the annual Asia Pacific Petroleum Conference said on Monday they expect oil prices this year to be pressured by uncertainties surrounding the global economy, the U.S.-China trade war and increasing U.S. supplies.