By Yuka Obayashi
TOKYO (Reuters) – Oil prices rose on Thursday ahead of an OPEC+ meeting later in the day, with investors waiting to see what the producer group will do next on supply cuts, while also monitoring tensions in the Middle East.
Futures rose 12 cents, or 0.2%, to $72.43 a barrel by 01:03 GMT, while futures were at $68.70 a barrel, up 16 cents, or 0.2 %.
Both benchmarks fell nearly 2% on Wednesday.
The Organization of the Petroleum Exporting Countries and its OPEC+ allies are likely to extend their latest round of oil output cuts by at least three months from January when they meet online at 1100 GMT on Thursday, OPEC+ sources told Reuters, to provide additional support for the market oil.
OPEC+ aims to phase out supply cuts by next year.
“Market participants are closely watching whether OPEC+ will focus on boosting prices by extending output cuts or opt to defend its share of the global crude oil market by easing those cuts,” said Satoru Yoshida, commodity analyst at Rakuten Securities.
“The OPEC+ decision could prompt a short-term reaction, but the oil market is likely to rise for the rest of the year on expectations of a US economic recovery under the Trump administration and ongoing tensions in the Middle East,” he said.
Last week’s larger-than-expected draw in US crude inventories also provided some support for prices.
U.S. crude oil inventories fell more than expected last week as refineries ramped up production, the Energy Information Administration (EIA) said. Gasoline and distillate inventories rose more than expected during the week.
In the Middle East, Israel has significantly degraded Lebanon’s Hezbollah militarily, but the Iran-backed group is likely to try to rebuild its supplies and forces and pose a long-term threat to the United States and its regional allies, four sources briefed on the update told Reuters.
Israel said on Tuesday that it would return to war with Hezbollah if their truce collapses, and that its attacks would go deeper into Lebanon and target the country itself.
Meanwhile, Donald Trump’s Middle East envoy traveled to Qatar and Israel to launch a diplomatic push by the US president-elect to help broker a Gaza ceasefire and release hostages before he takes office on January 20, a source familiar with the talks told Reuters.
