Crude-oil futures traded higher Monday morning as reports ahead of a key meeting of oil producers overshadowed the partial freeing of the world’s largest container vessel, which had blocked the Suez Canal for about a week, producing massive logjams in global trade and straining energy assets.
News that Russia would support a rollover to May of output curbs imposed by members of the Organization of the Petroleum Exporting Countries and its allies, while seeking only a small hike for itself, was helping to offset some of the bearish factors for oil centered on the Suez Canal developments, traders said.
“You have the OPEC meeting and headlines out there that Russia supports rolling over their production cuts from April to May,” Tariq Zahir, managing member at Tyche Capital Advisors, told MarketWatch.
OPEC and its allies, including Russia, form a group known as OPEC+, and are set to convene on April 1 to discuss the cartel’s policy on production curbs, which have been imposed to help stabilize oil prices amid the COVID pandemic.
Earlier this month, OPEC+ ministers approved a “continuation of the production levels of March for the month of April,” and Saudi Arabia said it would self-impose curbs on its production to keep prices in check, surprising markets and helping to send crude values firmly higher.
OPEC+ are holding back about 8 million barrels a day of output, 1 million of which represents Saudi production.
At this coming meeting, Russia is expected to request a small increase and will support stable prices through May, according to a report from Reuters.
Against that backdrop, West Texas Intermediate crude for May delivery the U.S. benchmark, added 49 cents, or 0.8%, to trade at $61.47 a barrel on the New York Mercantile.
Prices had traded lower earlier after reports of the prospect of the Suez Canal being cleared soon.
May Brent crude added 67 cents to reach $65.13 a barrel on ICE Futures Europe.
On Friday, WTI posted a 0.8% weekly drop and Brent retreated 0.2% for the week, with both contracts producing their third straight weekly decline as the slipped deeper into correction territory, typically defined as a drop of at least 10% from a recent peak.
Over 300 vessels are waiting to pass through the Suez canal, which has been blocked since the 1,312-foot MV Ever Given ran aground at the crucial trade chokepoint on March 23.