Oil price surge: Fuel costs rise as OPEC+ producers meet to discuss supply cut

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Oil costs have risen extending three percent gains in the previous session. This comes as OPEC+ producers are set to meet on Wednesday to discuss reducing its output by as much as two million barrels per day.

This would be the biggest production cut since 2020 as the COVID-19 pandemic slashed demand.

Brent crude rose 11 cents (10 pence) to $91.91 (£80.46) a barrel after climbing $2.94 (£2.57) in the previous session.

US West Texas Intermediate (WTI) crude futures picked up 5 cents (four pence) to $86.57 (£75.78) a barrel after gaining $2.89 (£2.53) in the previous session.

Speaking about the potential cut ANZ research analysts said: “A reduction in output on this scale would significantly tighten the market.”

President Biden is pushing for the organisation not to reduce output as the American administration tries to keep gas prices down, a source told Reuters.

The real impact on supply from a lower output target would be limited as several OPEC+ countries are already producing far below their existing quotas.

OPEC+ missed its production target in August by 3.58 million bpd (barrels per day).

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Commonwealth Bank commodities analyst Vivek Dhar said in a note: “The US dollar, global growth concerns and EU sanctions due to take effect on December 5 all remain crucial drivers of oil prices in the short term.”

The 45th Meeting of the Joint Ministerial Monitoring Committee (JMMC) and the 33rd OPEC and non-OPEC Ministerial Meeting will take place in person at the OPEC Secretariat in Vienna on Wednesday.

It will be the first in person ministerial meeting since the pandemic.



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