Investing.com – Crude oil prices settle higher as positive commentary concerning the OPEC-led pact strengthen investor expectations that the oil cartel would continue with output cuts.
On the New York Mercantile Exchange for February delivery rose 24 cents to settle at $63.97 a barrel, while on London’s Intercontinental Exchange, rose 10 cents to trade at $69.26 a barrel.
Kuwaiti energy minister Bakheet Al-Rashidi said the oil market was “very stable” and vowed that OPEC remains committed to output cuts “no matter the price.”
That eased some investor concerns that OPEC would seek to exit the agreement as the recent surge in prices is expected to lead to a ramp up in non-OPEC output, led by the U.S. shale producers.
Goldman Sachs said recently shale producers are enjoying significant gains, taking advantage of the surge in prices as costs average about $50 to $55 per barrel.
Morgan Stanley, meanwhile, identified several important factors supporting oil prices at current levels. The bank highlighted low interest rates while noting that oil prices are lagging their usual correlation with inflation, which should keep oil futures supported.
The bank raised its Brent forecast for the third quarter of 2018 to $75 per barrel, up from $63 per barrel.
Also adding to positive sentiment were expectations that data this week would show a decline in US crude oil stockpiles for the ninth-straight week. American Petroleum Institute weekly inventory report is slated for Wednesday after US markets close, while the EIA issues its supply totals Thursday at 10:30 a.m. ET.
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Source: Investing.com
