Oil Prices Rise Over 1% on OPEC Cuts

• Oil Prices Rise Over 1% on OPEC Cuts

Oil prices rose on Wednesday following a report that the Organisation of Petroleum Exporting Countries and partners will extend production cuts until December.

Brent crude oil, Nigerian type of oil, gained 1.16 percent or 68 cents to $59.42 per barrel. While the US West Texas Intermediate (WTI) gained 55 cents or 1.04 percent to settle at $53.36.

Traders believe the cartel would extend production cuts “and wait until world demand catches up with the supply situation,” according to Andy Lipow, president of Lipow Oil Associates in Houston.

Mohammad Barkindo, OPEC Secretary-General, on Tuesday said the organisation would do what it could with partners to ensure market stability beyond 2020.

OPEC+ (OPEC and allies) had agreed to lower production by 1.2 million barrels per day until March 2020 in 2018. Analysts believe that accord would be extended given weak global growth and uncertainty.

“You did see the OPEC secretary general say OPEC could act to keep the market stable, and if we come back under pressure again we might see that again,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.

Also, the partial agreement between the US and China is aiding price increase despite global uncertainty.

On Thursday, prices pulled back as weak global growth and projected increase in US crude inventories weigh on market outlook.

Brent crude oil slipped to $59.09 from $59.42 recorded on Wednesday.