Oil Trades Near 17-Month High Before Planned OPEC Supply Cuts

Futures rose as much as 0.7 percent in New York, advancing for an eighth day in the longest winning streak in almost seven years. Crude inventories should return to equilibrium and prices stabilize as the agreed cuts go into effect, Venezuelan Oil Minister Eulogio Del Pino said Tuesday on state television. A monitoring committee consisting of some OPEC nations and non-members will meet on Jan. 13 to track compliance with promised supply reductions, according to OPEC Secretary-General Mohammad Barkindo.

“The market is moving higher in the belief that compliance will be seen,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “We have now rallied about 20 percent since late November on the expectation that OPEC and non-OPEC will deliver the promised cuts. Sooner or later the market will adopt a wait-and-see approach, but not before year-end with so many looking for a high closing price on their books.”

WTI for February delivery gained 25 cents to $54.15 a barrel on the New York Mercantile Exchange at 11:23 a.m. in London. The contract added 88 cents to close at $53.90 on Tuesday, the highest since July 2, 2015. Total volume traded was about 51 percent below the 100-day average. Prices are up about 46 percent this year.

Brent for February settlement rose 31 cents to $56.40 a barrel on the London-based ICE Futures Europe exchange. Prices on Tuesday climbed 93 cents to settle at $56.09. Futures have gained 51 percent this year. The global benchmark traded at a premium of $2.28 to WTI.
more at: https://www.bloomberg.com/news/articles/2016-12-27/oil-trades-near-17-month-high-before-planned-opec-supply-cuts

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