Oil caps longest winning streak since August ahead of OPEC cuts

Oil climbed in New York, capping the longest winning run in more than four months amid optimism that output cuts by major producers will help eliminate a supply glut. Futures advanced 1.7 per cent in New York, rising for a seventh session to the highest close in more than 17 months. 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. Organisation of Petroleum Exporting Countries (OPEC) and 11 nations from outside of the group, including Russia, have agreed to trim about 1.8 million barrels a day next year. As inventories return to equilibrium, Brent prices should stabilise between $60-$70 a barrel, Venezuela oil minister Eulogio Del Pino said. Oil has traded near or above $50 a barrel since the OPEC 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-Luaibi said Thursday in Cairo at a meeting of the Organisation of Arab Petroleum Exporting Countries. OPEC and its partners have established a committee to monitor the cuts and ensure producers abide by their pledges, OPEC Secretary-General Mohammad Barkindo said. West Texas Intermediate for February delivery rose 88 cents to settle at $53.90 a barrel on the New York Mercantile Exchange, the highest level since July 2, 2015. There was no trading Monday because of the Christmas holiday. Total volume traded was about 61 per cent below the 100-day average. Prices are up about 45 per cent this year. Brent for February settlement climbed 93 cents to end the session at $56.09 a barrel on the London-based ICE Futures Europe exchange. The global benchmark was at a premium of $2.19 to WTI. (Jessica Summers/Bloomberg)

More from Business News