Brent crude oil rose above $55 a barrel this morning and was trading at a 16-month high on rising prospects of a tightening market after OPEC agreed to a landmark deal to cut production last week.
Reuters reports Brent crude is up 19% since the agreement was struck on Wednesday and U.S. crude is up 16%.
Brent futures, the global benchmark used to trade oil, soared to $55.33 a barrel—their highest price since July 2015. West Texas Intermediate traded up 48 cents, also 1%, at $52.16 a barrel.
The OPEC deal has given speculators impetus to increase bets on higher oil prices.
After the Organization of the Petroleum Exporting Countries last week agreed to curb production by 1.2 million barrels per day from January, eyes have now turned to a meeting this weekend between OPEC and non-OPEC producers to expand the deal.
Non-OPEC producers are expected to agree to add an output cut of 600,000 barrels per day in Vienna on Dec. 10. While drillers and investors celebrated last week’s deal to cut production, local economist Loren Scott says Louisiana’s struggling oil economies will not see immediate relief.
“Something’s got to happen to (increase) the price $10 or higher to see some movement” in Lafayette or Houma, Scott told Daily Report last week.
