Crude Oil Prices Settle Higher Amid Strong OPEC Compliance

Investing.com – Crude oil futures settled higher on Tuesday as market participants continued to expect that ongoing strong OPEC compliance with the production-cut deal will continue to support oil prices.

On the New York Mercantile Exchange for January delivery rose 15 cents to settle at $57.62 a barrel, while on London’s Intercontinental Exchange, gained 45 cents to trade at $62.90 a barrel.

OPEC oil output fell in November by 300,000 barrels per day (bpd) to its lowest since May, a Reuters survey found on Monday, as the oil cartel maintained strong compliance with the deal to curb output.

Expectations for ongoing strong OPEC compliance stoked investor hopes that rebalancing in oil markets would continue through 2018 as Goldman Sachs raised its 2018 forecasts for both Brent and WTI.

Goldman Sachs raised its 2018 forecasts on Brent and WTI to $62 per barrel, and $57.50 a barrel, respectively. That is an increase from its previous 2018 Brent forecast of $58 per barrel and WTI forecast of $55 per barrel.

“While the deal leaves room for an earlier exit than currently scheduled, we now reflect this resolve in our supply forecast, with full compliance for longer and a more modest exit rate,” Goldman Sachs analysts said in a note.

The upbeat session for crude futures comes ahead of inventory data from the American Petroleum Institute on Tuesday as well as a further report from EIA on Wednesday expected to show a for the second-straight week.

U.S. crude production, meanwhile, is likely to be closely monitored amid fears that U.S. producers are set to ramp up output.

U.S. output rose in September to 9.5 million barrels per day (bpd), the highest monthly output since 2015, the EIA said last week.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.