Oil inches higher on OPEC+ supply cut expectations

Oil prices edged higher on Monday, supported by expectations that major producers will keep supplies tight, and growing hopes that the Federal Reserve will leave interest unchanged to avoid dampening the U.S. economy.

Brent crude November futures was up 3 cents at $88.58 a barrel at 0333 GMT. U.S. West Texas Intermediate crude (WTI) October futures rose 9 cents to $85.64 a barrel.

The slight gains in Asian trade came after both contracts ended last week at their highest levels in more than half a year, having weakened in the two previous weeks.

“Crude oil prices have been primarily driven by the anticipation of additional supply cuts from major oil-producing nations, Russia and Saudi Arabia,” said Sugandha Sachdeva, executive vice president and chief strategist at Acme Investment Advisors.

Sachdeva noted, however, that the steady increase in U.S. oil production could limit further significant gains in price.

Russian Deputy Prime Minister Alexander Novak said on Thursday that Russia had agreed with partners in the Organization of the Petroleum Exporting Countries (OPEC) on the parameters for continued export cuts. An official announcement with details of the planned cuts is expected this week.

Russia has already said it will cut exports by 300,000 barrels per day (bpd) in September, following a 500,000 bpd cut in August. Saudi Arabia is also expected to roll over a voluntary 1 million bpd cut into October.

This report’s information was first seen on REUTERS; to read more, click this link.