NYMEX’s West Texas Intermediate crude oil February delivery closed $0.25 higher to $53.27 per barrel in Dubai trading, climbing 0.7% from the previous close. Meanwhile Brent oil traded the same for its March delivery at $55.94 a barrel on the London ICE Futures.
In December, Brent crude has already reached $57.89; the commodity’s highest since July 2015, while US crude rose by $0.20 cents to $53.22.
Oil futures rose 0.5% in the New York trading, leading to the commodity’s seventh-session high.
“Current oil prices reflect positive factors we’ve been seeing recently, including expectations about outputs cuts by OPEC and non-OPEC nations. Questions remain on whether the rally will continue because unless are new bullish items, the market may see more uncertainties in the long term,” stated a commodities analyst.
The market was closed on Monday for the Christmas holiday, and expected to trade light by Tuesday as investors are anticipated to be on a soft mood until the year ends.
Oil is continuously experiencing gains as it is headed to the start of the year where the oil production cuts both from OPEC members and non-members will begin on January 1.
The Organization of Petroleum Exporting Countries aims to bring back the balance in the oil market through cutting the production and reducing the supply. With the commodity’s present performance in the market, analysts believe that oil could reach $60 per barrel during the first half of 2017.
By January, OPEC members and 11 other oil-producing countries will begin with the production cuts assigned per country. Members agreed to cut oil output to as much as 1.8 million barrels per day, while the non-members will cut 558,000 barrels a day on their production.
After six months, OPEC will reassess the condition of the market and see if the production cuts did have the outcome intended.
Since the output agreement last November 30 among OPEC members and the December agreement made by the non-member, oil prices has already experienced extended gains in the market, reaching over $55 and climbing 44% already throughout 2016.
“At this point, most market watchers are optimistic that participating nations will comply [with] the production quotas in the first few months,” a commodities analyst said.
Meanwhile, countries like Libya and Nigeria will increase their production cuts due certain conflicts that curbed the countries’ oil output. On Monday, Libya reported to have produced 622,000 barrels a day, which was a bit higher from the recorded levels.
So there we have it! Be enlightened with the latest news on online trading, commodities, stocks, technology, and economy. Subscribe now! Trade12 Reviews waits for you. Visit our website here.