Oil jumps more than 3pct as Opec+ mulls cuts of up to 1 million bpd

Oil prices jumped more than three percent in early Asian trade on Monday as Opec+ considers cutting output of up to 1 million barrels per day at a meeting this week to support the market.

Brent crude futures rebounded US$2.82, or 3.3 percent, to US$87.96 a barrel by 2337 GMT after settling down 0.6 percent on Friday (7.37am on Saturday in Malaysia).

US West Texas Intermediate crude was at US$82.09 a barrel, up US$2.60, or 3.3 percent, following a 2.1 percent loss in the previous session.

Oil prices have tumbled for four straight months since June as Covid-19 lockdowns in top energy consumer China hurt demand while rising interest rates and a surging US dollar weighed on global financial markets.

To support prices, the Organization of the Petroleum Exporting Countries and their allies, a group known as Opec+, are considering an output cut of 0.5 million to one million bpd ahead of Wednesday's meeting, Opect+ sources told Reuters.

This will be the group's second consecutive monthly cut after it reduced output by 100,000 bpd last month.

"Anything less than 500kb/d would be shrugged off by the market. Therefore, we see a significant chance of a cut as large as 1mb/d," ANZ analysts said in a note.

- Reuters