Oil prices edge up as Opec+ mulls output cut from February

London — Oil prices edged up on Tuesday as tension around Iran’s seizure of a South Korean tanker simmered and after it emerged that oil cartel Opec and its allies, including Russia (Opec+), is studying a possible production cut in February, according to a document.

Brent crude futures for March rose 35c to $51.44 a barrel by 9.47am GMT, while US West Texas Intermediate (WTI) crude for February was at $48.04 a barrel, up 42c.

Both contracts fell more than 1% on Monday after Opec+, failed to agree on changes to February’s oil output.

Saudi Arabia argued against pumping more because of new lockdowns while Russia led calls for higher production, citing recovering demand.

According to an Opec document dated January 4, the group is studying a 500,000 barrel per day (bpd) output cut for February, and three other scenarios, which include stable production or an increase of 500,000 bpd.

Opec+ is due to resume talks at 2.30pm GMT.

Tensions around Opec member Iran seizure of a South Korean vessel continued, with Iran saying the Asian country owed it $7bn.

Sending bearish signals, England went into a new lockdown on Monday as its Covid-19 cases surged.

“Near-term demand growth is stalling due to the resurgence of Covid-19 across North America, Europe and the Middle East and is likely set for deeper declines over the next several months,” Fitch Solutions said, adding that Brent is expected to average $53 a barrel in 2021.

Reuters