Oil prices edged higher on Tuesday over expectations that major oil producers of the Organization of Petroleum Exporting Countries (OPEC) and allies will adhere to the group policy of gradually raising output at a time of growing demand.
International benchmark Brent crude was trading at $89.38 per barrel at 0656 GMT for a 0.13% increase after closing the previous session at $89.26 a barrel.
American benchmark West Texas Intermediate (WTI) was at $88.28 per barrel at the same time for a 0.14% gain after trade in the previous session ended at $88.15 a barrel.
The 23-members of OPEC and allies, known as OPEC+, will hold their scheduled meeting on Wednesday to decide whether to extend the current plan of increasing output by 400,000 barrels per day (bpd) through March.
The OPEC+ group reduced its daily crude oil production by approximately 10 million barrels in April 2020 due to the sharp decline in demand following the emergence of the COVID-19 pandemic. As global economies and oil demand started to recover, the group also began to ease these cuts in April.
In July, major producing countries agreed to raise output incrementally by 400,000 barrels per day (bpd) from August to December and extend the production cut agreement from April 2022 to December 2022.
Investors are now monitoring whether the group will agree to add more barrels to the market given that the worst of the pandemic has been left behind and major economies are gradually rebounding.
The tension between Ukraine and Russia is still supporting higher oil prices by threatening secure supplies to markets in Europe.
The US and its European allies have warned that Russia is setting the stage for an invasion of Ukraine and in preparation have positioned over 100,000 troops, along with significant artillery and tanks on its border with the former Soviet republic.
Although Moscow has denied it is preparing for a military offensive, with claims that its troops are there for regular exercises, simmering tensions in the area and possible supply disruptions continue to provoke price rises.
By Sibel Morrow