Oil rises more than 1% ahead of OPEC+ meeting as Black Sea shutdowns provide support

Oil prices rose on Wednesday as investors turned their attention to an OPEC+ meeting to decide on output policy, while supply disruption caused by a storm in the Black Sea and lower U.S. inventories drove buying.

The West Texas Intermediate crude contract for January rose $1.45, or 1.9%, to settle at $77.86 a barrel, while the Brent crude contract for January rose $1.42, or 1.74%, to settle at $83.10 a barrel.

Both benchmarks gained about 2% on Tuesday as the market anticipated the Organization of the Petroleum Exporting Countries and allies such as Russia (OPEC+), will extend or deepen supply cuts.

OPEC+ on Wednesday continued talks, which sources had described as difficult. A meeting to decide on next year’s output policy on Thursday was, however, expected to go ahead on schedule, sources said on Wednesday.

“If they (OPEC+) fail to come to a preliminary deal, we cannot rule out the risk that the meeting is further delayed, which would likely put some downward pressure on oil prices,” Warren Patterson and Ewa Manthey, analysts from ING bank, said in a note to clients.

A severe storm in the Black Sea region has disrupted up to 2 million barrels per day (bpd) of oil exports from Kazakhstan and Russia, according to state officials and port agent data, raising the prospect of short-term supply tightness.

Kazakhstan’s largest oilfields are cutting combined daily oil output by 56% from Nov. 27, the Kazakh energy ministry said.

The oil market also found support from a drop in U.S. crude inventories.

U.S. crude oil inventories fell by 817,000 barrels last week, according to market sources citing American Petroleum Institute figures.

Eight analysts polled by Reuters estimated on average that crude inventories fell by about 900,000 barrels in the week to Nov. 24. Weekly U.S. government data on stockpiles is due on Wednesday.

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