Oil rebounded on Tuesday after falling to more than 11-month lows in the previous session, as investors weighed a potential output adjustment from the major oil producers, who are set to have a key meeting this week.
Brent crude futures advanced $1.81, or 2.2%, and traded at $85.00 a barrel at 0446 GMT. U.S. West Texas Intermediate crude futures rose $1.37, or 1.8%, to $78.61 a barrel.
Although the market is already correcting itself after a sharp drop, word that the OPEC+ would seriously consider additional production cuts at the upcoming meetings further fuelled the price jump, analysts from Haitong Futures said in a note. The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, are set to hold a meeting on Dec. 4. Analysts at Eurasia Group suggested in a note on Monday that weakened demand out of China could spur OPEC+ to cut output.
But the fear of demand destruction in China kept pressure on the market despite a drop of daily COVID-19 cases on Monday."Bearish moods toward oil prices are spreading in Asia due to concerns about a decline in China's demand while the rare protests over the weekend also raised fears over the impact on Chinese economy," said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd.
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