(Bloomberg) — Oil erased earlier declines as investors focused on the upcoming OPEC+ meeting that could lead to deeper supply cuts by some of the world’s biggest crude producers.
Futures rose as much as 0.6% in New York at midday Tuesday after losing as much as 1.1%. Members of the Organization of Petroleum Exporting Countries are sending conflicting signals about whether tougher supply caps are imminent as the cartel and allies prepare for key meetings later this week.
Crude also bounced above its 50-day moving average and the U.S. greenback declined, bullish indicators for chart-watching technical traders.
“With the OPEC meetings coming up, there are expectations that not only will there be an extension of the existing cuts but also a further production cut,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Earlier, oil futures prices slid after U.S. President Donald Trump said he was willing to wait another year to sign a trade deal with China.
West Texas Intermediate for January delivery rose 12 cents to $56.08 a barrel at 12:05 p.m. on the New York Mercantile Exchange.
Read our OPEC+ Reality Check: Deal Extension Likely, Compliance in Focus
for February settlement advanced 4 cents to $60.96 on the London-based ICE (NYSE:) Futures Europe Exchange. The global benchmark crude traded at a $4.87 premium to for the same month.
“The global oil supply-demand balance requires an extension of the current OPEC+ cuts,” Goldman Sachs Group Inc (NYSE:). analysts including Damien Courvalin wrote in a report. “Already large speculative buying in recent weeks and some expectations for a longer/larger cut suggests that an uneventful three-month extension is unlikely to provide much upside to current prices.”
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