Oil Prices Edge Higher Ahead of OPEC+ Meeting

Oil prices nudged higher on Thursday as investors awaited a decision from key producers on whether they would maintain or ease supply cuts in the second half of the year.

Brent crude for September gained 17 cents, 0.2%, to $74.79 a barrel by 0355 GMT while the U.S. West Texas Intermediate crude for August was at $73.68 a barrel, up 21 cents, or 0.3%, close to its highest since 2018 of $74.45.

WTI gained more than 10% in June while Brent climbed over 8%, touching highs since 2018, as demand increased due to summer travel picked up and more people got vaccinated.

Analysts had forecast a wider supply deficit globally in the second half as the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, maintained production cuts while demand rises.

OPEC+ is easing supply cuts between May and July by 2.1 million barrels per day and will meet on Thursday to decide whether to leave production unchanged or boost output, possibly by more than 1 million bpd or by a more modest 0.5 million bpd in August. The group is expected to also discuss whether to extend the supply reduction deal beyond April 2022.

In the United States, crude stockpiles fell last week for the sixth straight week in response to rising demand, data from the Energy Information Administration showed.

A drop in crude inventories at Cushing, Oklahoma, the delivery point for WTI, to the lowest since March 2020 also underpinned the U.S. benchmark, squeezing its discount to Brent to the narrowest since June 2020 on Wednesday.