Oil future rose Tuesday, hitting a one-year high ahead of this week’s meetings of major producers that aren’t expected to result in any major changes in output levels.
West Texas Intermediate crude for March delivery rose $1.27, or 2.4%, to $54.82 a barrel on the New York Mercantile Exchange after trading at a session high of $54.96, its highest intraday level for a most actively traded contract since January 2020. April Brent crude, the global benchmark was up $1.28, or 2.3%, at $57.63 a barrel on ICE Futures Europe.
Oil has been helped by surveys indicating members of the alliance between the Organization of the Petroleum Exporting Countries and other major producers, a group known as OPEC+, lifted output in January by less than was allowed under their agreement.
Also, voluntary cuts of 1 million bpd by OPEC’s de facto leader, Saudi Arabia, are set to be implemented from the beginning of February though March.
Meanwhile, global stocks remained firm on Tuesday, with stock-index futures pointing to a rise for U.S. benchmarks, as with investors encouraged by news on the pace of vaccine rollout in the U.S. and the prospect of more fiscal aid from Congress which may speed the economic recovery and energy demand.
A meeting by an OPEC+ technical panel Tuesday is set to be followed by a formal meeting Wednesday.
“No changes in policy are expected from the group, with OPEC+ having already agreed on output levels for the remainder of the first quarter earlier this year,” said Warren Patterson, head of commodities strategy at ING, in a note.
Saudi Arabia, meanwhile, was due to implement a unilateral production cut of 1 million barrels a day for February and March.