Oil prices rose in Asian trading on Wednesday on expectations that major producers will extend production cuts at a meeting this Sunday and that fuel consumption should start to rise with the start of the peak summer demand season, UNN writes with reference to Reuters.
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Brent crude oil futures for July delivery added 18 cents, or 0.2%, to $84.40 per barrel by 06:30 GMT (09:30 Kyiv time). July futures for US West Texas Intermediate rose 28 cents, or 0.3%, to $80.11. Both grades added more than 1% to the price a day earlier.
Traders and analysts expect the Organization of the Petroleum Exporting Countries and its allies, including Russia, known as OPEC+, to maintain voluntary production cuts totaling about 2.2 million barrels per day.
Expectations that OPEC+ members will extend production cuts have inspired optimism in the markets, and the move will be seen as a concerted effort to stabilize prices and rebalance the global oil market, said Suganda Sachdeva, founder of Delhi-based research firm SS WealthStreet.
"In addition, the start of the US summer car season stimulates seasonal consumption growth and usually provides a positive impetus for crude oil prices," she added.
Memorial Day in the US on Monday is said to signal the start of the peak demand season in the US, the world's largest oil consumer, and continued production cuts should support prices as consumption increases.
"Initial data suggests that a relatively large number of trips to the United States were made during Memorial Day, the traditional start of the driving season. Air travel was also active," said Daniel Hines, senior commodity strategist at ANZ Bank.
Increased fighting in the Gaza Strip as Israeli tanks advanced to the heart of the Rafah section also provided some backing for prices amid concerns of a widening of the conflict to the greater Middle East, a key supply region.
Investors were also keeping an eye on the US crude oil inventories data from the American Petroleum Institute, which will be released later in the day.
Investors are also awaiting US inflation data this week, which could affect expectations of interest rate cuts by the Federal Reserve and impact oil prices.