Crude oil holds near annual peaks, awaiting OPEC cuts
|Source: The Hitavada Date: 29 Dec 2016 09:16:50|
OIL prices edged up for a fourth consecutive session on Wednesday, close to their peaks since mid-2015, with the market awaiting evidence of OPEC supply reductions in the new year. International Brent crude futures were up 12 cents at $56.21 a barrel by 1248 GMT. Brent hit $57.89 on December 12, its highest since July 2015. US benchmark West Texas Intermediate (WTI) crude oil prices were up 7 cents at $53.97 per barrel, not far from the year’s high of $54.51 reached on December 12.
Oil prices have gained 25 per cent since mid-November, helped by expectations for OPEC’s supply cut and solid US economic figures that have also bolstered equity prices.
Trading is expected to remain thin this week ahead of the New Year holiday. The market is taking a wait-and-see approach to the official start of the landmark deal reached by the Organisation of the Petroleum Exporting Countries (OPEC) and several non-OPEC members to reduce their output. The deal is set to kick in from January 1. OPEC and non-OPEC producers are expected to lower production by almost 1.8 million barrels per day (bpd), with Saudi Arabia, OPEC’s largest producer, agreeing to bear the lion’s share of the cuts. Iraqi Oil Minister, Jabar Ali al-Luaibi said Wednesday his country, which has seen fast production growth in the past two years, would cut supply by 2,00,000-2,10,000 bpd from January. Luaibi said on a visit to fellow OPEC member Kuwait that he saw oil prices rising to $60 per barrel as the cuts would help ease the global glut of the past three years, according to Kuwait News Agency (KUNA).