Investing.com– Oil prices rose Wednesday, extending recent gains on expectations that OPEC+ will keep production cuts in place at the onset of the travel-heavy U.S. summer season.
At 09:10 ET (13:10 GMT), rose 0.4% to $84.22 a barrel, while climbed 0.4% to $80.17 a barrel.
US fuel demand set to increase in coming months
Oil markets were boosted by growing optimism over the U.S. summer season, which usually marks at least two months of elevated demand in the world’s biggest fuel consumer.
Upcoming is expected to further this notion, with analysts predicting a 2 million barrel draw in overall inventories.
Still, optimism over the U.S. was held back by repeated warnings from the Federal Reserve that interest rates will potentially stay high for longer, amid sticky inflation.
This boosted the , limiting any major upside in crude.
Focus this week is on key U.S. data, which is the Fed’s preferred inflation gauge. A string of Fed officials are set to speak this week, while a revised reading on first quarter gross domestic product is also on tap.
OPEC+ expected to keep supply cuts in place
Traders also bet that the Organization of Petroleum Exporting Countries will keep ongoing production cuts in place during a meeting over the weekend.
The group is currently cutting output by 5.86 million barrels per day (bpd), equal to about 5.7% of global demand, in an attempt to balance a market hit by falling demand.
The cuts include 3.66 million bpd by OPEC+ members to the end of 2024, as well as a further 2.2 million bpd of voluntary cuts by some members, mainly Saudi Arabia, which expire at the end of June.
The move to forgo an in-person meeting, likely signals a “nothing to see here” production decision through year end, according to analysts at RBC Capital Markets, in a note dated May 28.
“We see no appetite at this juncture to add more barrels to the market and trigger another price move to the downside. The current price level is already causing several producers to take on additional debt and push out timelines for some high-profile projects,” RBC added.
(Ambar Warrick contributed to this article.)