The Organization of the Petroleum Exporting Countries and other producers including Russia meet on May 25. Market watchers expect them to extend output cuts of 1.8 million barrels a day until the end of March 2018.
The OPEC-led group is trying to reduce a global crude glut in the face of rising production in the United State. An OPEC panel is considering even deeper supply cuts to try to boost prices and reduce forward selling.
Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, said hedge funds expect the crude glut to recede.
“Time and again they are rebuilding long positions,” he said. “There seems to see this persistent bias to buy on the dips. They’re not getting bearish, they’re coming back in.”
Many investors remain concerned about growing U.S. crude production, which has climbed 10 percent since mid-2016 to 9.3 million barrels per day.
U.S. drillers added eight oil rigs in the week to May 19, bringing the total count to 720, the most since April 2015, according to Baker Hughes.