Oil rises on expectations of further OPEC+ supply cuts

LONDON — Oil futures rose more than US$1 on Monday, extending gains on the prospect of OPEC+ deepening supply cuts to shore up prices after four weeks of decline on demand worries. Brent crude futures rose $1.78 to $82.39 a barrel by 1:50 p.m. GMT. U.S. West Texas Intermediate crude was up $1.71 at $77.60. The front-month December WTI contract expired later on Monday. The more active January futures gained $1.79 to $77.83. Both contracts settled four per cent higher on Friday after three OPEC+ sources told Reuters that the producer group, comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, is set to consider whether to make additional supply cuts when it meets on Nov. 26. Oil prices have dropped by almost 20 per cent since late September while prompt inter-month spreads for Brent and WTI slipped into contango last week. In a contango market prompt prices are lower than those in future months, signalling sufficient supply. “In light of last week’s obliteration of oil bulls, some kind of response was forthcoming from the (OPEC) producer group,” said Tamas Varga of oil broker PVM. “If additional cuts are agreed, a short-term price boost is expected, but its longer-term price impact seems dubious as enforcement and adherence will be the salient issue.”