Oil prices rise more than 1% as signs indicate tightening market ahead of OPEC+ decision

Crude oil futures rose more than 1% on Friday as signs point to a tightening market ahead of an OPEC+ decision on production cuts.

The West Texas Intermediate contract for April gained by $1.51, or 1.93%, to $79.77 a barrel. May Brent futures added $1.40, or 1.71%, to $83.31 a barrel.

U.S. crude and the global benchmark booked a second consecutive monthly gain as front month contracts trade at a premium to later months, which is typically a sign of a tightening oil market.

OPEC+ is considering rolling over its production cuts through the second quarter and possibly the end of the year, three sources in the organization told Reuters this week. The cartel and its allies are expected to make a decision on the cuts in the first week of March, sources told Reuters.

Brent crude futures could break out to $95 per barrel range in the second quarter as bulls have become more aggressive in buying at higher lows, Paul Ciana, a technical analyst with Bank of America, told clients in a note Thursday.

A breakout through a resistance level of $84.80 to $85 per barrel for Brent would confirm a change to the upside, but the global benchmark will have to hold a support level of $79.50 to $80 a barrel in March, Ciana said. If Brent falls below that level, the benchmark could drop to the bottom of its range at $75 to $73 a barrel, he said.

On the geopolitical front, cease-fire negotiations in the Israel-Hamas war are in jeopardy after scores of Palestinians were killed in Gaza City while waiting for humanitarian aid.

“I am rejecting the international pressure to end the war before we achieve all of its goals,” Israel Prime Minister Benjamin Netanyahu said in press conference Thursday.

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— CNBC’s Michael Bloom contributed to this report.