Investing.com – WTI crude oil prices settled higher Monday as traders cheered a report suggesting the Organization of the Petroleum Exporting Countries was considering an output hike well below levels many had initially feared.
On the New York Mercantile Exchange crude futures for July delivery rose 1.30% to settle at $65.69 a barrel, while on London's Intercontinental Exchange, Brent rose 2.2% to trade at $75.08 a barrel.
Members of the Organization of Petroleum Exporting Countries (OPEC) are discussing an agreement that would raise oil output by 300,000 to 600,000 barrels a day (bpd) over the next few months, Bloomberg reported, citing people briefed on the talks.
That is well below the 1.5 million bpd uptick in production touted a few weeks ago, reducing investor fears of a significant slowdown in rebalancing in oil markets, which could potentially hurt oil prices.
The discussions come as OPEC attempts to placate opposing demands from its members and Russia. Russia favours a large output hike, while other OPEC members including Iraq and Iran believe production should be maintained as oil prices still need to be supported.
OPEC and its allies' 1.8 million (bpd) production-cut agreement agreed in November 2016 has played a key role in ridding the market of excess crude supplies. The OPEC-led deal is expected to come under review at the oil-cartel's meeting later this week.
Some analysts said they expect the focus of the OPEC meeting will be on replacing the drop in Venezuelan crude output as the country's energy sector has come under heavy pressure amid U.S. sanctions.