Oil extended the longest winning streak in more than four months before Opec and other producing nations start reducing output to stabilise the market.
Futures advanced 0.4 per cent in New York, climbing for a seventh session. Prices are set to recover next year as production cuts help to re-balance an oversupplied market, Saudi Arabia’s energy minister Khalid Al-Falih said last week. Opec and 11 nations from outside of the group including Russia have agreed to trim about 1.8 million barrels a day from January.
Oil has traded near $50 a barrel since the Organisation of Petroleum Exporting Countries agreed last month to curb production for the first time in eight years. Iraq, the second-biggest Opec producer, is fully committed to the accord, oil minister Jabbar Al-Luabi said Thursday in Cairo at a meeting of the Organization of Arab Petroleum Exporting Countries.
“Current oil prices reflect positive factors we’ve been seeing recently, including expectations about output cuts by Opec and non-Opec nations,” said Will Yun, a Seoul-based commodities analyst at Hyundai Futures. “Questions remain on whether the rally will continue because unless there are new bullish items, the market may see more uncertainties in the long term.”
West Texas Intermediate for February delivery rose 20 cents to $53.22 a barrel on the New York Mercantile Exchange at 11:50 a.m. in Dubai after climbing as much as 0.6 percent earlier. There was no trading Monday because of the Christmas holiday. Total volume traded was about 57 per cent below the 100-day average. Prices are up about 44 per cent this year.
Brent for February settlement added 9 cents to $55.25 a barrel on the London-based ICE Futures Europe exchange. The contract rose 11 cents to $55.16 on Friday. The global benchmark was at a premium of $2 to WTI.
Opec and its partners have established a monitoring committee to ensure that producers abide by their pledges. The committee will hold its first meeting in January, at a location yet to be decided, Kuwaiti oil minister Essam Al-Marzouk said Thursday at an industry gathering in Cairo.