Crude oil futures rise as market anticipates OPEC+ meeting outcome

New York — 0230 GMT: Crude oil futures were higher in mid-morning trade in Asia Wednesday as the market looked ahead to a decision on production cuts from the upcoming OPEC+ meeting on Thursday.

At 10:30 am Singapore time (0230 GMT), May ICE Brent crude futures were up 65 cents/b (1.25%) from Tuesday's settle at $52.51/b, while the NYMEX April light sweet crude contract was 60 cents/b (1.27%) higher at $47.78/b.

OPEC+ is due to meet Thursday-Friday in Vienna to discuss the future of the group's current 1.7 million b/d supply cut agreement, which expires at the end of March.

"Oil should remain supported, but at this stage, the key is that OPEC+ presents a unified front and shows the group is capable of action," AxiCorp's chief market strategist Stephen Innes said Wednesday.

"However, a sustained move higher is unlikely until there is definitive evidence that the spread of the virus has slowed," Innes added.

A delegate-level OPEC+ technical committee met Tuesday to review the latest market scenarios, having last month recommended 600,000 b/d in new production cuts to help reverse the oil price slide after the coronavirus or COVID-19 outbreak.

Saudi Arabia has been urging the alliance to extend the deal and tighten quotas by another 1 million b/d or more, according to sources familiar with the negotiations.

"Oil prices rose after OPEC+ Joint Technical Committee put in a supply cut proposal of 600,000 b/d to 1 million b/d ahead of tomorrow's meeting," OCBC analysts said Wednesday. "We think that anything less than 1 million b/d supply cut would disappoint the energy market and result in Brent slipping back towards the $50/b handle," the OCBC analysts added.

Meanwhile, the G7 said in a joint statement Tuesday that it is closely monitoring the spread of the coronavirus and was ready to take fiscal measures where appropriate.