Oil prices rise on expectation of continued production cuts
Oil prices jumped about two percent on Friday, with Brent crude rising above $60/bbl.
NEW YORK – Oil prices jumped about two percent on Friday, with global benchmark Brent crude rising above $60/bbl, according to Reuters. The price increases were buoyed by statements from the world’s top producers that supported extending a deal to rein in output.
Ahead of OPEC’s policy meeting on Nov. 30, Saudi Arabia and Russia declared their support for extending an OPEC-led deal to cut supplies for another nine months. The pact currently runs to March 2018.
Brent futures rose to $60.53/bbl at their peak, the highest since July 2015 and more than 35% above its 2017 lows touched in June.
US West Texas Intermediate crude oil rose to $53.93/bbl, the highest since early March.
Oil prices have been hovering near their highest levels for this year amid signs of a tightening market, renewed support this week of an extension of production cuts, and tensions in Iraq. OPEC and other major producers including Russia have pledged to reduce production by around 1.8 MMb/d to reduce the global supply glut.
“If OPEC and their non-OPEC partners can agree to extend their production curtailments through 2018, then we estimate the oil market will remain in modest under-supply until 2019,” U.S. Investment bank Jefferies was quoted to say in the Reuters report.
Rising US crude production remains an issue for OPEC as it strives to clear a global overhang.
Government data showed that US crude production rose 1.1 MMb/d last week to 9.5 MMb/d after a decline due to Hurricane Nate, while US oil exports hit a new record four-week average of 1.7 MMb/d.