Oil prices increase amid weak dollar, on hopes for OPEC+ output cuts

Oil prices increased on Tuesday amid a weak dollar, and expectation from the Organisation of the Petroleum Exporting Countries (OPEC+) group to extend output cuts due to concerns that demand would still be subdued.

Brent crude futures were up 11 cents, or 0.1 percent, at $80.09 a barrel at 0510 GMT. U.S. West Texas Intermediate (WTI) crude futures were trading 4 cents higher, also 0.1 percent, at $74.90 a barrel.

Both benchmarks clipped some gains after rising sharply in early Asian trade. Previously, Brent has fallen by more than 18 percent and WTI by over 21 percent since end-September highs.

OPEC+ and allies including Russia, will hold an online ministerial meeting on Thursday Nov. 30 to look into production aims for 2024. The meeting comes amid a harsh decline in oil prices, due to concerns that the market was packed despite output cuts by OPEC+.

Moreover, powerful non-OPEC producers, such as the United States, have added to pressure on prices.

OPEC+ set oil prices dropping last week by postponing its meeting in order to resolve disagreements over production targets for African producers.

However, it has moved towards a compromise, four OPEC+ sources told Reuters on Friday, potentially helping the group’s key leader Saudi Arabia find consensus on the need to expand output cuts.

The drop in prices could spare Riyadh any pressure from the U.S. to restrain output cuts, according to analysts.

“Saudi Arabia may be comforted that US gasoline prices have fallen for 60 straight days. This may soften the US opposition to any move to tighten oil markets and support prices,” the Australia and New Zealand Banking Group Limited (ANZ) Research said in a note on Tuesday.

The U.S. dollar’s draw back to its lowest level in three months should boost demand from countries that pay for their oil in other currencies.