Rigging equipment is pictured in a field outside of Sweetwater, Texas June 4, 2015. Reuters/Cooper Neill
Oil prices rose on Monday as investors took positions ahead of an OPEC meeting this week despite expectations that the producer group will not change its output policy.
Brent crude, the global oil benchmark, was trading up 48 cents at $45.34 a barrel at 1157 GMT. U.S. crude futures were 32 cents higher at $42.03 per barrel.
Nevertheless, both contracts are set to end November some 7-9 percent lower as a global supply glut shows no sign of diminishing.
Preparing for Friday’s the Organization of the Petroleum Exporting Countries (OPEC) policy decision, oil traders strengthened their positions to prepare for any unexpected outcomes.
“We see a lot of positioning ahead of the OPEC meeting at the end of the week. That is sparking a lot of interest,” said Michael Poulsen, oil analyst at Copenhagen-based Global Risk Management.
OPEC is determined to keep pumping oil vigorously despite the resulting financial strain even on the policy’s chief architect, Saudi Arabia, alarming weaker members who fear prices may slump further towards $20.
Any policy U-turn would be possible only if large producers outside the exporters’ group, notably Russia, were to join coordinated output cuts.
OPEC and Russia could make “some sort of co-ordinated attempt to reduce production”, said Jonathan Barratt, chief investment officer at Sydney’s Ayers Alliance.
“The glut continues, but I do feel that it could be reversed quite quickly given the change…