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Benchmark Brent crude <LCOc1> was up $1.00 a barrel at $74.05 by
1100 GMT. U.S. light crude <CLc1> was 80 cents higher at $66.34.
The Organization of the Petroleum Exporting Countries is meeting
in Vienna together with non-OPEC oil producers to discuss output
policy.
Saudi Arabia and Russia want to raise output, but some other
OPEC members, including Iran, have opposed this.
"OPEC decision day is upon us and pockets of anxiety are keeping
oil prices on the front foot," said Stephen Brennock, analyst at
London brokerage PVM Oil Associates.
Analysts expect OPEC to announce an increase in production of
500,000 to 600,000 barrels per day (bpd), which would help ease
tightness in the oil market but would not create a glut.
"Any deviation from this figure is likely to generate a market
response," said Warren Patterson, commodities strategist at
Dutch bank ING in Amsterdam. "A more relaxed policy will push
Brent toward $70 a barrel, while restrictive measures will
support crude oil back toward $80."
Oil prices have been on a roller-coaster ride over the last few
years, with the international marker, Brent, trading above $100
a barrel for several years until 2014, dropping to almost $26 in
2016 and then recovering to over $80 last month.
The most recent price rally followed an OPEC decision to
restrict supply in an effort to drain global inventories.
The group started withholding supply in 2017 and this year, amid
strong demand, the market tightened significantly, triggering
calls by consumers for higher supply.
Falling production in Venezuela and Libya, as well as the risk
of lower output from Iran as a result of U.S. sanctions, have
all increased market worries of a supply shortage.
Another big uncertainty for oil is the escalating dispute
between the United States and its trading partners, which could
hit U.S. crude oil exports to China.
Asian shares hit a six-month low on Friday as tariffs and the
U.S.-China trade battle start taking their toll.
If a 25 percent duty on U.S. crude imports is implemented by
Beijing, American oil would become uncompetitive in China,
forcing it to seek buyers elsewhere.
Chinese buyers are already starting to scale back orders, with a
drop in supplies expected from September.
"If China's import demand dries up, more than 300,000 bpd of
U.S. crude will have to find a new destination," energy
consultancy FGE said.
(Additional reporting by Henning Gloystein in Singapore; Editing
by David Evans)
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