Oil prices rose at least $1 per barrel on Thursday after Saudi Energy Minister Prince Abdulaziz bin Salman called for caution and vigilance at the beginning of a meeting of OPEC ministers and their allies about the future of supply cuts.
Brent crude futures were up $1.11, or 1.7%, at $65.18 a barrel by 1347 GMT while US West Texas Intermediate (WTI) crude increased $1.07, or 1.8% to $62.35.
Ministers from OPEC members and their allies kicked off a meeting to tackle the future of an oil output cut at 1300 GMT.
Analysts and traders say a 4-month price rally from below $40 a barrel is now out of step with demand and that physical sales are not expected to match supply until later in 2021.
But with prices above $60, some analysts have predicted OPEC+ producers will increase output by nearly 500,000 barrels per day (bpd) and expect the Kingdom of Saudi Arabia to at least partially end its voluntary reduction of 1 million bpd.
On Wednesday, 3 OPEC+ sources said some members believe that output must remain unchanged and that it was not immediately clear whether the Kingdom would end or extend its voluntary cuts.
“The market … can take back at least 500,000 bpd (excluding Saudi’s extra cuts) from April and even more in following months, in line with the recovery we expect in oil demand,” said Rystad’s head of oil markets, Bjornar Tonhaugen.
“Some mild negative price reaction will take place, though, if the decision is to increase output. Such a development would prevent some steep stock draws that had been priced in for a while for coming months.”
In the United States of America, despite a record surge of at least 21 million barrels in crude oil stockpiles last week, gasoline stocks fell by the most in 30 years as refining plunged to a record low due to the freeze that hit Texas .
Giving a floor to prices, Yemen’s Houthi forces said on Thursday that they had fired a missile at a Saudi Aramco facility in Saudi Arabia’s Red Sea city of Jeddah. There was no immediate confirmation from Saudi authorities.