New York-traded West Texas Intermediate (WTI) crude settled up $2.89, or 3.2%, at $86.52 per barrel, extending Monday’s 5.2% run-up. The rally comes right after a woeful September and third quarter for the oil market, where WTI ended the month down 12.5 % and July-Sept period lower by 24%.
Brent crude, the London-traded global benchmark for oil, settled up $2.94, or 3.3%, at $91.80 per barrel, adding to Monday’s 4.4% gain. Brent finished September down 11% and the third quarter lower by 22%.
The Financial Times reported that Saudi Arabia was seeking to raise oil prices by holding its first in-person OPEC+ meeting in Vienna in more than two years on Wednesday, in a move set to anger the US and help Russia. The Saudis lead the original 13-member OPEC. Russia and nine other oil producing countries became allies in 2016.
Russia, facing US and Western sanctions on its oil due to the Ukraine crisis, has been exporting over the past six months largely to China, India and other countries that have resisted the sanctions against Moscow.
The size of the production cut at the OPEC+ meeting is still to be agreed upon, but Saudi Arabia and Russia are pushing for reductions of 1-2 million barrels per day or more, changes that could be phased in over several months, US media reported. The move would probably trigger US countermeasures, including the additional release of oil from the Strategic Petroleum Reserve (SPR), which the Biden administration has already drawn heavily from this year, the report said.
But White House Spokeswoman Karine Jean-Pierre told reporters on Tuesday that the Biden Administration is not considering new SPR releases beyond October.
Production commitments by OPEC+ have, however, become suspect over the past year.
OPEC+ fell short of its production target by 3.583 million barrels daily in August, according to an internal document of the 23-nation alliance reported by the media on Sept. 19. In July, the cartel fell short by 2.892 million barrels daily, according to media reports.