Oil prices added more than 1 percent
on Tuesday, extending its rise for a third subsequent session, on hopes of
trade deal and as OPEC hinted to declining production over the coming five
years.
Brent
crude futures surged 1 percent at $62.75 a barrel after hitting a high of
$62.88, the highest level since late September. Crude oil WTI futures climbed
to a top of $57.10 a barrel.
Optimism
prevailed among financial markets’ investors on rising hopes of seeing a trade
pact between the U.S. and China this month.
Meanwhile,
China is pushing U.S. President Donald Trump to eliminate more tariffs forced
in September in order to reach an interim trade agreement.
Later
in the day, eyes will focus on the American Petroleum Institute’s weekly crude
oil report, ahead of Wednesday’s Energy Information Administration official
inventories data.
OPEC to slash output
OPEC said the organization will supply
lower oil output over the next five years as on rising U.S. shale oil
production and other output from other producers.
OPEC's crude oil and other liquids
production is expected to contract to 32.8 million barrels per day by 2024,
compared with 35 million barrels per day in 2019, the organization said in its
2019 World Oil Outlook report released Tuesday.
Increased activity to combat climate
change in the West and the widespread use of alternative fuels have caused more
long-term oil demand to come under greater scrutiny.
OPEC production has declined in the past
few years under an agreement with Russia and other non-OPEC producers to
support the market. The agreement resulted in higher oil prices, boosting
production of non-OPEC producers and OPEC is expected to curb production by
2020.
The U.S raised its
oil production to record high levels as a result to the shale revolution that
allowed new technology to take advantage of previously considered uneconomical
reserves. OPEC's production of oil has declined as a result of voluntary
restrictions and U.S. sanctions on Venezuela and Iran.