Oil steady ahead of OPEC+ supply policy decision

Three sources told Reuters the group of oil producers was likely to stick to their existing agreement to produce an additional 400,000 barrels per day (bpd) in November. 

Oil prices have risen due to a rise in global demand and supply disruptions, pushing Brent last week above $80 to a near three-year high.

"Our base case expectations for today's OPEC meeting is that OPEC continues with its existing agreement to unwind its production cuts by around 400,000 bpd each month," Morgan Stanley analysts said in a note.

"However if there is a reason to do so faster, it is because OPEC's own oil consumption is also recovering at a rapid pace."

OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, is facing pressure from some countries to add back more barrels to the market to help lower prices as demand has recovered faster than expected in some parts of the world.

OPEC+ agreed in July to boost output by 400,000 barrels per day (bpd) each month until at least April 2022 to phase out 5.8 million bpd of existing cuts.

Four OPEC+ sources told Reuters recently that producers were considering boosting output by more than that.

The earliest any increase would take place would be November since the previous OPEC+ meeting decided October volumes.

The oil price rally has also been fuelled by an even bigger increase in gas prices that have spiked 300% and are trading at around $200 per barrel in comparable terms, prompting switching to fuel oil and other crude products to generate electricity and for other industrial needs.