Investing.com – Crude oil prices settled higher after OPEC announced it would extend cuts in oil output by nine months through 2018 on Thursday, as major oil produces expressed the need to ensure rebalancing in markets continued.
On the New York Mercantile Exchange for January delivery rose 10 cents to settle at $57.40 a barrel, while on London’s Intercontinental Exchange, lost 13 cents to trade at $62.40 a barrel.
The announcement of a nine-month extension had a muted impact on oil prices as the extension was said to be mostly priced in, but reports that both Nigeria and Libya decided to cap production added a positive slant on the outcome of the meeting.
Market looked ahead to news conference due late Thursday for confirmation on whether the deal will include a review in June 2018 to reassess the cuts, or possibly end them.
The production-agreement has rein in excess supplies, but further cuts are needed as Khalid Al-Falih said a draw of about 150 million barrels were required to bring global crude inventories back to the five-year average.
The deal comes as concerns mount over rising output from non-participating countries, including the U.S., where producers have ramped up crude oil production more than 15% to 9.66 million barrels per day (bpd) since mid-2016, not far from top producers Russia and Saudi Arabia.
Inventories of U.S. crude fell by roughly 3.4 million barrels for the week ended Nov. 24, beating expectations of 2.3 million barrels, while gasoline and distillate inventories unexpectedly rose, The Energy Information Agency said on Wednesday.
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Source: Investing.com
