Crude oil rose again on Tuesday, extending early-week gains ahead of a highly anticipated meeting of the Organization of the Petroleum Exporting Countries (OPEC). The 15-member cartel is widely expected to announce significant output cuts when it meets in Vienna on Thursday.
Crude Extends Gains
Both U.S. and global energy markets put up firm gains on Tuesday, though much of that rally had faded by late-morning. U.S. West Texas Intermediate (WTI) for January delivery reached a session high of $54.55 a barrel on the New York Mercantile Exchange. It would later consolidate at $53.20, gaining 25 cents, or 0.5%. February Brent futures peaked at $63.58 a barrel on London’s ICE futures exchange. At the time of writing, it was trading at $62.27 a barrel, gaining 58 cents, or 0.9%.
Nymex natural gas futures also rose sharply, with the January contract gaining 18 cents, or 4.1%, to $4.51 per Btu.
Energy prices surged on Monday in response to weekend trade negotiations between U.S. President Donald Trump and China’s Xi Jinping. Both leaders effectively agreed to a 90-day truce following high-level talks in Buenos Aires, Argentina. This means the U.S. will refrain from raising tariffs on Chinese imports in the new year while Beijing has vowed now to tax American automobiles.
OPEC in Focus
OPEC will likely announce new production measures on Thursday that could help crude prices recover for the remainder of the year. The Saudi-led cartel is believed to be eyeing a reduction of 1.3 million barrels per day. However, much of that reduction will rely on participation from its partners, including Russia.
Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman have agreed to cooperate on output levels,