Singapore — 0200 GMT: Crude futures were higher in mid-morning trade in Asia Wednesday after plunging overnight as a jittery market awaited the OPEC+ meeting on Thursday and G20 meeting on Friday for cues.
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At 10 am Singapore time (0200 GMT), ICE Brent June crude futures were up 72 cents/b (2.26%) from Tuesday's settle at $32.59/b, while the NYMEX May light sweet crude contract was $1.30/b (5.50%) higher at $24.93/b.
"The possibility of output cuts from OPEC+ and beyond continue to be the main driver for prices and is expected to remain so until the output decision is reached on Thursday," OCBC analysts said in a note Wednesday.
"For such an unprecedented output cut to occur, we think some kind of participation from the US needs to materialize, otherwise there is little incentive for global cooperation," the analysts added.
US President Donald Trump has so far not committed the US to any deal, saying crude production declines are coming naturally from the crash in oil prices.
"At this stage of the drama, all eyes and ears remain trained on both the US response and the outcome of OPEC+ virtually meeting," AxiCorp's chief market strategist Stephen Innes said in a note Wednesday.
Still, doubts lingered over whether potential output cuts might be sufficient to outweigh the drastic fall in demand due to the COVID-19 pandemic.
"The stark reality is setting in that the proposed production cut deal is unlikely to be anywhere big enough to offset the unparalleled demand devastation," Innes added.
Global crude demand destruction is expected to peak at around 20 million b/d and any OPEC+ deal would not remove much more than 10 million b/d, according to market observers.
Crude futures had declined sharply Tuesday after latest US data projected only modest US production cuts in 2020.
The US Energy Information Administration said Tuesday it expects US production will only fall to an average of 11.8 million b/d in 2020, down from 12.3 million b/d in 2019 and earlier estimates of all-time highs near 13 million b/d issued late last year and in early 2020.
Oil markets were hoping to see US projections falling below 11 million b/d, Platts reported earlier.