Oil gains ahead of OPEC+ meeting on additional supply cuts

Oil prices rose on Tuesday as traders await major oil producers’ decisions on whether to extend production cuts in an upcoming virtual meeting this week.

Brent crude futures gained 0.91%, or 35 cents, at $38.67 per barrel. U.S. West Texas Intermediate crude futures were up 0.56%, or 20 cents, at $35.64 per barrel.

Brent has gained sharply in recent weeks amid the supply cuts imposed by OPEC and its allies. However, both benchmarks are still down 40% this year.

OPEC+ producers are considering extending their 9.7-million-barrel cut beyond June. The organization is set to hold a virtual meeting on June 4.

An extended record output cut could push oil prices to $40. Saudi Arabia is among the oil producers that are planning to extend the cut.

Crude inventories at Cushing, Oklahoma dropped to 54.3 million barrels in the week ended May 29, supporting the price increase.

The growing U.S.-China tensions over the latter’s tightening grip on Hong Kong, as well as weak manufacturing data that showed European and Asian factories struggling, both capped further price gains.