U.S. crude oil gained more than 1% on Tuesday after booking a loss last week as the market focuses on a key OPEC+ meeting this weekend.
OPEC+ will hold a virtual meeting on Sunday to review its production policy. A coalition of OPEC+ members are voluntarily holding 2.2 million barrels per day off the market to support prices.Deutsche Bank analyst Michael Hsueh said OPEC+ countries are unlikely to raise production given that the current price of Brent is closer to $80 per barrel than $90 per barrel.
Tamas Varga, analyst with oil broker PVM, said the fact that the meeting is virtual indicates"that no changes in production will be forthcoming."Deutsche Bank has maintained its current Brent forecast of $83 per barrel for the second quarter and $88 in the second half of the year, assuming OPEC+ will maintain its production policy on Sunday.
Saudi Arabia understands maintaining a target price for oil significantly above a breakeven price of $75 per barrel for the broad U.S. oil sector is unsustainable longer term, Hsueh said. And the stabilization of U.S. production since September has given OPEC some room to maneuver, he said. Feeling out of the loop? We'll catch you up on the Chicago news you need to know. Sign up for the weeklyGoldman says buy call options in these stocks set to benefit from an AI-driven energy demand surgeGoldman is bullish long term on nuclear power and uranium. This stock is a key way to gain exposureBiden's fuel sale likely won't have major impact on summer pump prices