Oil prices increase on expectations of extended production cuts

Oil futures increased for a fifth day, rising to their highest in nearly six weeks, on expectations that OPEC and other producing countries could agree to expand output cuts to support prices.

Brent increased 42 cents, or 0.7%, at $63.01 a barrel while US crude was 46 cents, or 0.8%, higher at $58.31 per barrel, Reuters reported.

Saudi Arabia’s new Energy Minister, Prince Abdulaziz bin Salman, said that OPEC and its allies would continue to cut outputs, staying inline with the group’s policies. He added that the OPEC+ alliance, which includes OPEC and non-OPEC producers including Russia, would be in place for the long term.

The OPEC+ joint ministerial monitoring committee (JMMC), which reports on compliance with the cuts, is scheduled to meet this week in Abu Dhabi.

OPEC members Iraq and Nigeria exceeded their quota in August 2019, raising concerns about producers’ adherence to the supply agreement. Russia’s oil output in August 2019 crossed its quota under the OPEC+ agreements.

Executives at the annual Asia Pacific Petroleum Conference said on Monday that the uncertainties surrounding the worldwide economy and increasing US supplies may affect oil prices.

A preliminary Reuters poll has showed that crude stockpiles are likely to have dropped in the US for a fourth consecutive week last week. Five analysts polled by Reuters estimated, on average, that crude inventories dropped 2.6 million barrels in the week to 6 September 2019.