Oil prices climb nearly 1% as traders await outcome of Opec+ meet

Oil prices climbed nearly 1 per cent on Tuesday, as traders awaited the outcome of an Opec+ meeting later this week.

Brent crude futures rose 66 cents, or 0.92 per cent, to $72.49 a barrel by 0909 GMT, while US West Texas Intermediate crude climbed 63 cents, or 0.93 per cent, to $68.73.

Opec+ is likely to extend its latest round of output cuts until the end of the first quarter at its Dec 5 meeting, according to sources.

"Given a rise in compliance with production cuts from Russia, Kazakhstan, and Iraq, the lower Brent price level, and indications in press reports, we assume an extension of Opec+ production cuts till April," Goldman Sachs analysts said in a note.

Opec+, which accounts for about half of the world's oil production, has been looking to gradually unwind production cuts through 2025.

However, the prospect of an oil market surplus has exerted downward pressure on prices, with Brent trading nearly 6 per cent below its average for December 2023.

"I think there's no other option but to defer it," Priyanka Sachdeva, a senior market analyst at Phillip Nova said, adding that mounting pressure from participant-nations to increase production could cap any extension at a couple of months.

The global oil demand outlook remains weak, with China's crude imports likely to peak as early as next year, as demand for transport fuel begins to decrease, researchers and analysts said.

Saudi Arabia, the world's top exporter, is expected to cut crude prices for Asian buyers to the lowest levels in at least four years, according to traders.

Concerns that the US Federal Reserve may not cut rates at its December meeting have also capped oil prices.

In the Middle East, holes continued to appear in a US-brokered ceasefire between Israel and militant group Hezbollah, with nine people killed in strikes on two southern Lebanese towns shortly after Hezbollah fired missiles on an Israeli military position in the disputed Shebaa Farms area on Monday.