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.