Markets are anxiously waiting for the first OPEC deal results. The oil cartel and other non-OPEC oil producers pledged to cut the output by 1.8 million bdp.
10 January, AtoZForex – Oil prices are headed higher on Tuesday, as markets are expecting the oil output cuts by the Organization of the Petroleum Exporting Countries (OPEC). The oil bloc and other non-OPEC oil producers have pledged to cut as much as 1.8 million barrels per day from the oil global production.
Traders await OPEC deal results
The oil prices recovered from the lows in the previous session. The black gold lost its positions previously due to the doubts around the promised cuts by the oil producers.
Brent crude futures were changing hands at $55.20 a barrel at 0827 GMT, trading up 0.45 percent from the previous session. US West Texas Intermediate (WTI) crude oil futures were trading at $52.222 per barrel, up 0.5 percent.
Market experts stated that the gains on Tuesday emerged as a result of the hopes that some cuts would materialize in spite the overall market uncertainty. The market participants are largely expert Saudi Arabia and Abu Dhabi to cut the oil production, as states claim that they started the process. Dutch Bank ING has commented:
“Lastest comments from OPEC members….suggest that members are making output adjustments to comply with agreed cuts.”
Will OPEC deal work out?
Moreover, BMI Research has added that the synchronized output limitations will back the market rebalancing that will push down the global stock levels. Also, this would lead the BMI Research to revise the Brent crude forecast for 2017 to $57 a barrel.
Investors stated that firm demand from India also backed the oil prices. Appetite for black gold from the world’s third-biggest oil consumer reached 16.53 million tons in December. Moreover, the demand rose 4.3 percent from December 2015.
In spite of this, some analysts still saw a possibility that overall production levels may not be decreased as planned. Crude oil dipped by almost 4 percent in the previous session on worries about rising production in Iran and Iraq. The possible increases in production were perceived as a threat to the efforts to curb the fuel supply glut. Moreover, supplies are rising in the North America. The average Canadian oil rig count for December stood at 209, up 36 rigs from November.
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