Oil Higher as Saudi Pushes for Deeper Cuts

Oil prices edged higher on rising expectations of deeper output cuts when OPEC and its allies meet this week, although skepticism about a deal among some analysts limited the gains.
Brent futures rose 43 cents to $61.35 a barrel on Tuesday. US West Texas Intermediate crude was up 44 cents at $56.40 a barrel, CNBC reported.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, are discussing a plan to increase an existing supply cut of 1.2 million barrels per day by a further 400,000 bpd and extend the pact until June, two sources familiar with the matter said.
Saudi Arabia is pushing the plan to deliver a positive surprise to the market before the initial public offering of state-owned Saudi Aramco, the sources said.
But it remains unclear if there is consensus within the group to achieve a deeper cut.
Russian Energy Minister Alexander Novak said on Tuesday he expected this week’s meeting to be constructive, but added that Moscow had yet to finalize its position.
Vagit Alekperov, CEO of Russia’s No.2 oil producer Lukoil, said it would not be expedient to deepen production cuts in the winter season, especially for Russia.
Goldman Sachs said on Monday that OPEC+ will likely extend output curbs through June, but expects the “uneventful” three-month extension to provide little support to prices.
The factors behind this view included a large increase in production from legacy non-OPEC projects and a still uncertain outlook for demand growth, it added.
OPEC ministers will meet in Vienna on Thursday and the wider OPEC+ group will gather on Friday.