NEW YORK (Reuters) – Oil prices strengthened ahead of their settlement on Wednesday, buoyed by hopes that OPEC and its allies will strike a production cut agreement, shrugging off bearish signals from surging U.S. crude inventories.

Brent crude LCOc1 was up $1, or 3%, at $32.87 by 2:23 p.m. EDT (1823 GMT). U.S. West Texas Intermediate (WTI) crude CLc1 rose $1.55 cents to $25.18 a barrel.

Crude has collapsed in 2020 because of a slide in demand due to the coronavirus pandemic and excess supply. Brent dropped to $21.65, its lowest since 2002, on March 30.

Thursday’s video conference meeting between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia – a group known as OPEC+ – was expected to be more successful than their gathering in March, which ended in a failure to extend supply cuts and a price war between Saudi Arabia and Russia.

“The coming extraordinary producing-countries meeting is the only hope on the horizon for the market,” said Bjornar Tonhaugen of Rystad Energy.

“Nobody wants to go short ahead of what could be a ‘positive surprise’ by OPEC++.”

While OPEC sources have said a deal to cut production is conditional on the participation of the United States, doubts remain as to whether Washington will contribute.

The U.S. Department of Energy said on Tuesday U.S. output was already declining, without government action.

The benchmarks pared some of their gains, with Brent turning negative briefly, after U.S. government data showed that crude inventories last week soared by a record 15.2 million barrels, even as production was cut by 600,000 barrels per day to 12.4 million bpd. [EIA/S]

U.S. crude inventories rose as refiners slashed runs and the delivery hub for WTI at Cushing, Oklahoma, also posted a record weekly build of 6.4 million barrels, the U.S. Energy Information Administration said. [EIA/S]

FILE PHOTO: A maze of crude oil pipes and valves pictured during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S., June 9, 2016. REUTERS/Richard Carson/File Photo

Cushing is on pace to be full in three weeks if this week’s gain is repeated, Bob Yawger, director of energy futures at Mizuho in New York.

“There are multiple bad angles: Refining utilization. Crude stockpiles. Cushing is crazy – that’s a gigantic number,” Yawger said.

Additional reporting by Alex Lawler and Jane Chung; Editing by Marguerita Choy and David Gregorio

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