With the Suez Canal freed up and shipping returning to normal, oil traders are now watching the next OPEC plus meeting on Thursday evening, Sydney time to see what happens to oil prices.
Oil prices fell on Tuesday as shipping resumed using the Canal after five days on hold after the huge container ship was moved after a high Spring tide.
Brent crude was down 9 cents, at $US64.88 a barrel, after gaining 0.6% on Monday. US West Texas Intermediate was steady at $US61.57 a barrel, having fallen 1% in the previous session.
Thursday’s OPEC+ meeting will almost certainly see the extension of supply curbs may be on the table amid new coronavirus pandemic lockdowns in Europe and parts of Asia and looming in the US.
Reuters says Saudi Arabia is prepared to accept an extension of the production cuts through June, and is also ready to prolong voluntary unilateral curbs amid the latest wave of coronavirus lockdowns.
There were also reports that Russia would back broadly stable oil output at Thursday’s meeting.
In early March OPEC and its allies (mainly Russia) dropped proposals for expanding output and decided to keep a tight rein on production, sticking with current quotas for April with some exceptions.
The Saudis largely held to the same sort of compromise they reached at the last OPEC plus meeting in January.
As part of the agreement, Russia, which pushed hard for increases, will be allowed to produce an additional l130,000 barrels a day, while Kazakhstan was granted a boost of 20,000 barrels a day.
After January’s OPEC meeting, the Saudis volunteered to cut its own production by one million barrels a day, to about 8.1 million. That cut had been scheduled to expire in April.
Now that cut will continue into May.
US analysts say Thursday’s meeting will in effective be a rubber stamp for the deal done earlier this month.
