Global benchmark Brent futures closed at $76.18 while United States WTI crude rose to $74.05.
OPEC+ is moving towards gradually adding about 2 million barrels per day (bpd) to the oil market from August to December, an OPEC+ source told Reuters news agency as the group eases back on output curbs amid a recovering global economy and an oil price rally.
The source told Reuters that monthly increases would amount to less than 0.5 million bpd. Another OPEC+ source told Reuters that top OPEC producer Saudi Arabia and top non-OPEC producer Russia had a preliminary agreement for a deal on easing output curbs from August.
Responding to oil demand destruction caused by the COVID-19 crisis, OPEC+ last year agreed to cut output by almost 10 million bpd from May 2020, with plans to phase out the curbs by the end of April 2022. Cuts now stand at about 5.8 million bpd.
Oil prices extended gains on news of the latest increase plans because some traders had expected a bigger output rise in August. Brent crude was trading at $76.40 a barrel by 13:15 GMT, up more than 2 percent and close to two-and-a-half-year highs.
The outlined increase “would keep the market tight this summer, with still rising demand over the coming weeks”, UBS analyst Giovanni Staunovo said, adding that consensus had been for the addition of 0.5 million bpd a month or slightly more.
Ministers from the Organization of the Petroleum Exporting Countries, Russia and their allies, a group known as OPEC+, began online meetings on Thursday. Sources told Reuters that they would decide policy from August and could also consider extending their overall pact on supply restraint beyond April 2022.
One source also told Reuters that active supply management could be extended until the end of 2022. OPEC finished its meeting just before 13:00 GMT with the wider OPEC+ meeting due to begin at 16:30 GMT.
An OPEC+ panel on Tuesday said it expected oil demand to grow by 6 million bpd in 2021 but flagged risks of a glut in 2022, saying there were “significant uncertainties” including an uneven global recovery and rising cases of the Delta variant of the coronavirus.
Saudi Arabia, Russia and other OPEC+ members have been cooperating closely since their big falling out in March 2020 just before the pandemic sent oil prices diving. The price crash drove them back together to forge their supply pact.
Yet the group still faces a challenge over how quickly to unwind the cuts.
Riyadh has usually taken a cautious approach about adding new supplies, reflecting uncertainty about the course of the pandemic. Russia, with a more diversified economy that is less reliant on oil, has generally shown concern that high prices could spur on rival United States production, which demands higher prices to be economic.