Oil on the rise with supply concerns ahead of OPEC+ meeting

Oil prices increased on Monday as investors expect that the world’s biggest oil producers will likely agree on a production cut for October during the OPEC+ meeting later in the day.

International benchmark Brent crude traded at $95.08 per barrel at 09.13 a.m. local time (0613 GMT) for a 2.21% gain from the closing price of $93.02 a barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI) was at $88.56 per barrel at the same time for a 1.94% rise after the previous session closed at $86.87 a barrel.

The 23 members of the group will hold the 31st ministerial meeting to discuss the production volume for October later on Monday.

Based on earlier remarks by Saudi and Omani energy ministers who backed output cuts to correct extreme volatility in the market, investors are hoping to see an agreement at the meeting to trim some production.

The imminent and likely positive conclusion to nuclear talks between Iran and the US is also pressuring prices.

Indirect talks between the US and Iranian diplomats, mediated by the EU, concluded in Vienna last month with an agreement on a draft text to revive the 2015 nuclear accord.

Tehran filed its response to the EU draft agreement on Aug. 15, a week after the talks ended in Vienna. The Biden administration responded to Iran’s comments through the EU coordinator.

The EU’s foreign policy chief Josep Borrell spoke last week of the likelihood of achieving a resolution soon.

Market players are also watching developments regarding a recent dispute between EU countries and Russia, as G7 member states agreed Friday to cap Russia’s crude oil export prices.

Soon after this decision, Russian energy giant Gazprom said on Friday that its key Nord Stream pipeline, which supplies gas to Europe, would remain shut due to a technical issue and could not restart until it is fixed.

Gazprom was due to reopen gas supplies via the Nord Stream pipeline on Saturday, which had been halted due to maintenance for three days on Aug. 31.

Capping further price increases, a major city in southwest China, Chengdu, announced an extension of lockdowns in response to recent outbreaks.

Shenzhen, a southernmost tech center, said it would implement tier-based anti-virus restriction measures starting Monday. A new round of COVID-19 testing was announced in Shenzhen, which came under lockdown on Saturday, and management said more lockdowns are on the table if the situation deteriorates.