Oil holds advance with OPEC+ cutbacks and geopolitics in focus

Oil held the biggest gain in a week, with OPEC+ set to affirm its policy of production cuts amid tensions in the Middle East and Russia.

Global benchmark Brent traded near $87 a barrel after gaining 1.6% on Monday, while West Texas Intermediate was above $82. OPEC+ delegates weren’t seeing a need to change supply policy at a review meeting next week, with quotas in place until June proving effective. In the Middle East, meanwhile, the Houthis renewed threats against Saudi Arabia if it supported US strikes.

Crude is headed for a surge of almost 13% this quarter after breaking out of a tight range that dominated the year’s opening weeks. Attacks by Ukraine on Russian refineries have aided gains, together with signs of strength in some product markets including gasoline. The positive overall market outlook has spurred hedge funds to increase their bullish bets on Brent.

Signs of a shift in monetary policy have also supported the mood. The US Federal Reserve has signaled a willingness to cut interest rates later this year, buoying appetite for risk assets.

Technicals are positive, too, with Brent’s moving averages close to forming a golden cross, a bullish pattern. That’s when an asset’s 50-day moving average exceeds the corresponding 200-day figure. Its last formation in August preceded Brent surging by more than $10 a barrel to above $95.