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NEW YORK: Oil prices soared more than $3 a barrel on Tuesday after Saudi Arabia floated the idea of OPEC+ output cuts to support prices and with the prospect of a drop in US crude inventories.

The Saudi energy minister said OPEC+ had the means to deal with challenges including cutting production, state news agency SPA said on Monday, citing comments Prince Abdulaziz bin Salman made to Bloomberg.

Global benchmark Brent crude gained $3.41, or 3.5 percent, to $99.88 a barrel by 10:53 a.m. EDT (1453 GMT). US West Texas Intermediate crude rose $3.74, or 4.1 percent, to $94.10.

“Much of the impetus behind today’s strength is being driven by comments out of Saudi Arabia alluding to a possible output cut in an attempt to ‘stabilize’ the market,” said Jim Ritterbusch of oil trading advisory firm Ritterbusch and Associates. 

In the comments reported on Monday, the Saudi minister said the paper and physical oil markets had become “disconnected.”

However, nine sources in the Organization of the Petroleum Exporting Countries told Reuters on Tuesday that OPEC+ production cuts may not be imminent and would coincide with the return of Iran to oil markets should Tehran clinch a nuclear deal with the West.

A senior US official told Reuters on Monday that Iran had dropped some of its main demands on resurrecting a deal.

Oil has soared in 2022, coming close in March to an all-time high of $147 after Russia’s invasion of Ukraine exacerbated supply concerns. Fears about a global recession, rising inflation and weaker demand have since weighed on prices.

While the price of Brent futures has fallen sharply from this year’s high, the market structure and price differentials in the physical oil market still point to supply tightness.

Underlining tight supply, the latest weekly reports of US inventories are expected to show a decline of 1.5 million barrels in crude stocks.