Crude futures settled higher Wednesday on optimism that Thursday's OPEC+ meeting would yield a production cut agreement.
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ICE June Brent settled 97 cents higher at $32.84/b and NYMEX May WTI was up $1.46 on the day at $25.09/b.
Oil rallied in the final minutes of trading after the Tass news service reported that Russia would be willing to cut 1.6 million b/d from its Q1 production level. Crude futures shot to session highs following the report, with Brent and WTI jumping around $1.20/b and $1.60/b respectively.
NYMEX May ULSD settled down 1.68 cents at $1.0107/gal and May RBOB was up 2.98 cents at 67.80/gal at market close.
Ministers from OPEC, Russia and nine other producers - the so-called OPEC+ group - will log on to a high-stakes online summit Thursday to settle geopolitical scores and parcel out production cuts.
"The following 24 hours will be critical for global oil prices," OANDA senior market analyst Edward Moya said. "With global storage tanks nearing capacity, this OPEC members and allied producers meeting should see some consensus reached, otherwise ugly uncoordinated production cuts could happen over the next couple of months."
The meeting will not include the world's largest oil producer, the US, though Energy Secretary Dan Brioullete is expected to take part in an emergency Saudi-chaired G20 ministerial webinar Friday that could endorse and widen any OPEC+ accord to narrow the widening gap between surplus oil supply and sickly demand.
But Ryan Sitton, a commissioner at the Texas Railroad Commission, said Wednesday that US crude output would fall at least 4 million b/d over the next three months "organically."
"I'm not participating in the OPEC+ call tmrw but if I were I'd say at least 20mbpd in cuts are needed & the US will cut at least 4mbpd in next 3 mos organically. If nothing is done inventories fill up in 2mos, at which point the world will need to cut as much as 30mbpd," Sitton tweeted.
US crude output fell 600,000 b/d to 12.4 million b/d during the week ended April 3, US Energy Information Administration data showed Wednesday.
With Trump administration officials exerting strong back-channel pressure on the countries to close a deal to stave off further industry bleeding, Saudi Arabia and Russia will likely be motivated to avoid a repeat of their last meeting a month ago, which ended in recriminations and launched a bitter price war.
Saudi Arabia has not disclosed how much output it would be willing to rein in, as the two countries remain split over the baseline production figures from which to determine new quotas.
Weakened global demand has sent ever-more crude into storage in recent weeks. Inventory levels at the major US storage hub at Cushing, Oklahoma, surged 6.42 million barrels to 49.24 million barrels last week, according to EIA data. The build was the largest-ever on record at Cushing, and put tank levels there at an estimated 62% of working capacity, an S&P Global Platts analysis showed.