Oil extended the longest winning streak in more than four months before OPEC and other producing nations start reducing output to stabilize the market.
As Bloomberg reports, futures advanced 0.4% in New York this morning, climbing for a seventh session. Prices are set to recover next year as production cuts help to re-balance an oversupplied market, Saudi Arabia’s Energy Minister Khalid Al-Falih said last week. OPEC and 11 nations from outside of the group including Russia have agreed to trim about 1.8 million barrels a day next year.
Oil has traded near or above $50 a barrel since the Organization of Petroleum Exporting Countries agreed last month to curb production for the first time in eight years. Iraq, the second-biggest OPEC producer, is fully committed to the accord, Oil Minister Jabbar Al-Luaibi said Thursday in Cairo at a meeting of the Organization of Arab Petroleum Exporting Countries.
“Current oil prices reflect positive factors we’ve been seeing recently, including expectations about output cuts by OPEC and non-OPEC nations,” says Will Yun, a Seoul-based commodities analyst at Hyundai Futures Corp. “Questions remain on whether the rally will continue because unless there are new bullish items, the market may see more uncertainties in the long term.”