Brent crude oil reached 2019 highs above $65 per barrel on Friday, as OPEC-led supply cuts and the announcement of a higher-than-expected cut by Saudi Arabia this week encouraged investors. Top exporter and de facto OPEC leader Saudi Arabia said on Tuesday it would cut over half a million barrels per day (bpd) more in March than the deal called for, sending prices surging. Prices were also buoyed by the partial closure of Saudi Arabia's Safaniya, its largest offshore oilfield with a production capacity of more than 1 million bpd. Click read more below for additional detail.
In the week ending January 22, 2016, West Texas Intermediate crude oil prices rose ~9% to close at $32.19 per barrel on January 22, 2016. Crude oil prices will also likely gain due to positive talks from Russia on production cuts. Crude oil prices rose more than 9% to close at $33.22 per barrel on January 28, 2016.
At the beginning of this week, crude oil prices fell by more than 5% on January 25, 2016. Iran’s record crude oil output of 4.13 MMbpd (million barrels per day) in December 2015 led investors to focus on oversupplies in the global crude oil markets. Iran’s crude oil production averaged 3.7–3.8 MMbpd in the months before December 2015. However, the sudden rise in the production levels renewed the focus on oversupplies.
Crude oil prices gained due to speculation about the news. Russia wants to talk with OPEC about cooperating to trim the oversupplies. Investors even ignored massive inventory builds of 11.4 million barrels reported by the American Petroleum Institute on January 26, 2016. They also ignored the U.S. Energy Information Administration’s crude oil inventory report. The announcement from Russia’s oil minister confirmed the news. As a result, crude oil prices continued to rise for the past three days. The prices gained ~9.4% from this week’s low of $30.34 per barrel on January 25, 2016. The bullish sentiment among investors will certainly help crude oil prices rise on today’s trade to post gains on a weekly basis.
The bullish sentiment among investors, due to positive talks from Russia, will cause the prices to rise. This will bring back the momentum in the oil industry. It’s suffering from long-term lower prices. The rise in prices will increase crude oil producers’ revenue like Murphy Oil (MUR), Continental Resources (CLR), Whiting Petroleum (WLL), Marathon Oil (MRO), and Anadarko Petroleum (APC).
more at: http://finance.yahoo.com/news/crude-oil-prices-set-weekly-113135247.html