Global oil benchmarks extended gains on Monday, November 20, as further supply cuts in OPEC+ production are expected in the coming weeks.

On Monday, oil futures experienced a gain of over $1, continuing their upward trajectory amid expectations of OPEC+ intensifying supply reductions, according to a report by Reuters. This move is aimed at stabilizing prices, following four consecutive weeks of decline driven by concerns about weakening demand.

Brent crude futures increased by $1.31, reaching $81.92 per barrel as of 1238 GMT. U.S. West Texas Intermediate crude also saw a rise of $1.16, reaching $77.05. The December WTI contract, set to expire later on Monday, experienced an uptick, while the more actively traded January futures climbed by $1.27, reaching $77.31.

Last week on Friday, both contracts experienced a 4% increase, according to sources as quoted by Reuters. This producer coalition, composed of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, is slated to deliberate on the possibility of implementing extra supply reductions during its meeting on November 26.

Since late September, oil prices have witnessed a nearly 20% decline, and last week, the prompt inter-month spreads for Brent and WTI transitioned into contango. In a contango market, prompt prices are lower than those in future months, indicating an ample supply.

“In light of last week's obliteration of oil bulls, some kind of response was forthcoming from the (OPEC) producer group. "If additional cuts are agreed, a short-term price boost is expected, but its longer-term price impact seems dubious as enforcement and adherence will be the salient issue," said Tamas Varga of oil broker PVM.

Whereas, in India, as per Multi Commodity Exchange (MCX), crude oil futures due for a November 20 expiry, was last trading higher by 3.03% at ₹8,260 per bbl, having swung from ₹8,018 per bbl, in the morning against a previous close of ₹6,252 per bbl on Friday.

The drop in oil prices last week was primarily sparked by a significant increase in US crude inventories and production remaining at historic highs. Additionally, apprehensions arose due to indications of weakening demand in China.

An additional element fueling pessimism was the rise in the number of Americans submitting new claims for unemployment benefits, coupled with a minor downturn in industrial production statistics.