Oil rose, bolstered by pockets of strength in physical crude markets, while traders weighed the potential for OPEC+ to extend its output cuts.

West Texas Intermediate climbed to just shy of $79 a barrel in a low-volume session, trading near the highest level of 2024. In the physical market, US refineries are benefiting from strong profit margins while foreign buyers are turning to American crude to avoid Red Sea shipping issues. The US benchmark’s prompt spread — the price difference between its two nearest contracts — has widened to 65 cents in backwardation, compared with a bearish contango structure less than four weeks ago. The move indicates a tightening supply outlook.

Meanwhile, traders are also keeping a close eye on next month’s meeting of the Organization of Petroleum Exporting Countries and its allies. Market participants and analysts alike expect Saudi Arabia and its partners will prolong their curbs into the second quarter.

Trading volumes were muted this week as many market participants attend International Energy Week in London, a major industry gathering, where attendees are set to weigh the outlook for oil this year. Russell Hardy, chief executive officer of Vitol Group, is among the scheduled speakers on the opening day.

Oil is grinding its way toward a second straight monthly advance, although it’s yet to break decisively out of its recent, narrow range. While tensions in the Middle East and OPEC+ supply curbs have supported crude prices, higher production from outside the group, especially the US, has capped the gains.

The market’s opposing drivers have prompted both Goldman Sachs Group Inc. and Bank of America Corp. to forecast that rangebound trading will persist in the near term. Goldman sees a $20 band centered on $80 a barrel, with muted volatility, while its rival expects oil to hold between $60 and $80.

Prices:

• WTI for April delivery rose $1.29 to settle at $78.87 a barrel in New York.
• Brent for April settlement advanced $1.12 to settle at $83.65 a barrel.