Oil prices little changed ahead of OPEC+ talks on supply cut

Oil prices were little changed on Wednesday ahead of a meeting of OPEC+ producers to discuss a big cut in crude output after gaining more than 3% in the previous session.

Brent crude was up 1 cent at US$91.81 a barrel at 0628 GMT, after climbing US$2.94 in the previous session.

U.S. West Texas Intermediate (WTI) crude futures fell 9 cents, or 0.1%, to US$86.43 a barrel after gaining US$2.89 a day earlier.

The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together called OPEC+, will meet in Vienna later on Wednesday to discuss output cuts of up to 2 million barrels per day (bpd), an OPEC source told Reuters.

A cut of that magnitude would be the biggest by OPEC+ since those made after the COVID-19 pandemic slashed demand in 2020.

“I will not be surprised if “buy the rumour, sell the fact” could happen since the strong rally in crude prices may have priced in such a production cut,” said Tina Teng, an analyst at CMC Markets.

Stephen Innes, managing partner at SPI Asset Management, said there “is a degree of profit taking and risk reduction ahead of the OPEC gathering”.

The United States is pushing OPEC+ producers to avoid making deep cuts, a source familiar with the matter told Reuters, as President Joe Biden looks to prevent a rise in U.S. gasoline prices.

The real impact on supply from a lower output target would be limited as several OPEC+ countries are already pumping well below their existing quotas. In August, OPEC+ missed its production target by 3.58 million bpd.

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