Oil climbs to six-week high on production cut hopes

  • by Ofeed Team
  • September 10, 2019, 17:24 AM
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Oil futures prices continued to rise for a fifth straight session on Tuesday, as expectations of production-cut extension by OPEC and other key oil producing countries sent prices to the highest level in nearly six weeks.

As of 09:18 GMT, Brent crude futures continued to rise today, reaching $62.88 a barrel after opening at $62.67 per barrel. The highest level was $63.40 a barrel, which is the highest level since August 1.  

West Texas Intermediate (WTI) crude futures also rose today, reaching $58.63 a barrel, the highest in six weeks, while it opening at $58.02 a barrel.

It should be noted, that if the oil market continued to rise today, it would be the longest profit-taking period since late July.

Expectations of continued reduction in production levels 

Prince Abdul Aziz, a member of the Saudi delegation to the Organization of Petroleum Exporting Countries (OPEC), said Saudi Arabia's policy will not change, in addition to the importance of maintaining a deal to cut oil production by 1.2 million barrels per day.

The OPEC+ Ministerial Joint Monitoring Committee scheduled to meet on Thursday in Abu Dhabi, where they are expected to announce their compliance with the planned cuts in the coming period.  

Trade war and its impact on the crude oil market 

Last week, Brent crude prices soared on easing trade woes, as the U.S. and China agreed to restart trade talks.

The trade war would continue to impact the prices of crude since it directly affects global growth and thereby world demand on energy products.

Another key factor to carefully watch this week is the U.S. crude inventories data, as the American Institute will release its report later on Tuesday, while the Energy Department data is due on Wednesday.

U.S. crude stockpiles may have fallen by 2.6 million barrels last week, extending its drop for a fourth straight week, the EIA report may show.

In case of further drop in crude stockpiles, oil price may take advantage and widen its gains, creeping higher towards resistance located at $64.20 a barrel.

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