Crude oil futures are headed for a second consecutive monthly gain as OPEC+ is expected to extend its production cuts through at least the second quarter.
The West Texas Intermediate contract for April gained 10 cents, or 0.13%, to $78.64 a barrel. The April Brent contract, which expires Thursday, fell 2 cents or 0.02% to $83.66 a barrel.
U.S. and Brent have gained about 6% month to date with first month contracts trading at a premium to later months. A premium for immediate versus later delivery typically indicates a tightening oil market.
OPEC+ is considering extending its production cuts through at least the second quarter, three sources told Reuters Wednesday. The cartel could keep the cuts in place for the rest of the year, two of the sources said.
OPEC+ agreed in November to slash 2.2 million barrels per day in the first quarter of 2024 as the U.S., Canada, Guyana and Brazil pumped crude at a breakneck pace, putting pressure on oil prices late last year.
Prices have also risen as the conflict in the Middle East rages on, with tensions rising on the Israel-Lebanon border and Houthi militants continuing their attacks in shipping in the Red Sea.
The conflict has not disrupted crude production in the region so far, though analysts have warned there is a risk of a direct confrontation between Iran and the U.S. that would impact the oil market.
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