Oil Steady Ahead of OPEC+ Meeting as Trade War Concerns Ease

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(Reuters) – Oil prices were little changed on Tuesday as easing trade war concerns offset expectations OPEC+ will decide to increase their output at a meeting later this week.

Brent crude futures were up 26 cents, or 0.4%, at $65 a barrel by 0920 GMT, while U.S. West Texas Intermediate (WTI) crude rose 25 cents, or 0.4%, to $61.78 a barrel.

Easing trade war concerns are lifting prices, but the upside remains limited until it is clear what the OPEC+ will decide on Saturday, said UBS analyst Giovanni Staunovo.

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The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, will likely finalise July output at their meeting, which sources have previously told Reuters will entail a production increase of 411,000 barrels per day.

Russian Deputy Prime Minister Alexander Novak said on Monday that OPEC+ had yet to discuss hiking output. The group is likely to finalise output quotas in an online ministerial meeting on May 28.

Eight OPEC+ members that had pledged additional voluntary cuts are now expected to meet on May 31, one day earlier than previously scheduled, three sources within the group told Reuters on Monday.

OPEC+ members had already agreed to accelerate oil output increases for a second month in June.

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However, U.S. President Donald Trump’s decision to extend trade talks with the European Union until July 9 alleviated immediate fears of tariffs that could suppress fuel demand.

Comments by Russia’s deputy prime minister and U.S. President Trump’s delaying of tariffs against the EU provided support to prices, said PVM analyst Tamas Varga.

Iranian President Masoud Pezeshkian said on Monday that Iran would be able to survive if negotiations with the U.S. over its nuclear programme fail to secure a deal.

If nuclear talks between the U.S. and Iran fail, it could mean continued sanctions on Iran, which would limit Iranian supply and be supportive of oil prices.

Reporting by Enes Tunagur in London, Anjana Anil in Bengaluru; Additional reporting by Sudarshan Varadhan; Editing by Christian Schmollinger, Michael Perry and David Evans