Oil prices rise as OPEC+ considers extending voluntary output cuts

Oil prices edged up more than $1 on Tuesday as producer group OPEC+ considers extending voluntary oil output cuts into the second quarter to provide additional support, sources said.Brent crude futures rose $1.04, or 1.2%, to a session high of $83.57 a barrel at 1:05 p.m ET (1805 GMT). U.S. West Texas Intermediate crude futures (WTI) were up $1.02 cents, or 1.3%, at $78.63.

OPEC+ could also keep the additional cuts in place until the end of the year, two of the sources told Reuters.“I think that the price action itself is calling attention to a tight physical balance in the market,” said Tim Evans, an independent analyst.Also supporting prices, Israel and Hamas, as well as Qatari mediators, all sounded notes of caution on Tuesday about progress towards a truce in Gaza, after U.S. President Joe Biden said he believed a ceasefire could be reached in under a week to halt the war for Ramadan.

Meanwhile, Yemen’s Houthi spokesperson said the group’s operations in the Red Sea would stop only when Israeli “aggression” against Gaza ends and the siege is lifted.Houthi missile and drone attacks on international shipping have driven up the cost of transporting energy products and contributed to a tighter market.

Elsewhere, there have been signs that Chinese oil demand could pick up and push prices higher.Global crude oil markets are expected to be fairly stable this year at around $80 a barrel, Russel Hardy, chief executive officer of oil and gas trader Vitol, said.Speaking at the Energy Institute conference, Hardy also said global oil demand was expected to peak in the early 2030s.

Also on Tuesday, Russian authorities announced a six-month ban on gasoline exports from March 1 to compensate for rising demand and to allow for refinery maintenance.Both oil benchmarks had settled more than 1% higher on Monday after declines of 2-3% over the previous week as markets factored in a greater likelihood that cuts to interest rates might take longer to come than previously expected.

The American Petroleum Institute industry group’s weekly U.S. crude inventories data is due to be released at 4:30 p.m. EST (2130 GMT).
Source: Reuters (Reporting by Paul Carsten in London, Arathy Somasekhar in Houston and Andrew Hayley in Beijing Additional reporting by Ahmad Ghaddar Editing by David Goodman, Mark Potter and Nick Macfie)