Russian President Vladimir Putin said Saturday he and Crown Prince Mohammed bin Salman "have agreed to extend our agreement" to limit production as prices slump on global markets. It is hard to say how emerging markets will react despite the economic ceasefire between Beijing and Washington and the plan to cut oil production.
The news is likely to see a jump in global oil prices today.
Investors remained doubtful over potential supply cuts, which tops the agenda of a meeting between Saudi-led OPEC and its allies in Vienna. Bloomberg reported that OPEC delegates said the leaders have given their political blessing for an agreement, but the size of any cap still has to be talked through. This comes after crude oil hit a four-year high at $86 a barrel and then suffered a 33 percent loss, hitting a low at 57.3 in later November. Natural gas was the best performed major commodity last month.
Trading action was also held in check ahead of weekend meetings of the Group of 20 in Argentina, where oil talks are expected take place on the sidelines, ahead of an official meeting on December 6 between OPEC and its allies.
According to EIA, U.S. crude oil imports and exports both increased in the week ending November 23.
Both main contracts have plunged by about a third since hitting four-year highs at the start of October, hit by a number of factors including easing demand, high production, softer-than-expected U.S. sanctions on Iran and a global growth slowdown.
While there was no announcement on how much would be cut and for how long, the pact between the world's two biggest crude exporters was cheered by oil traders, with Brent jumping USD 2.42 to USD 53.35 and West Texas Intermediate up USD 2.60 at USD 62.06 on Monday.
"It's hard to predict where oil prices will go from here but they have been heavily oversold", he said.
France's President Emmanuel Macron, who has faced intense protests against growing gasoline prices in his country, also called for cheaper oil at the G-20 summit.
Western Canada Select (WCS) crude oil sold for $12.38 a barrel a week ago and closed Friday up almost 10% to just under $17.
As the downbeat mood takes hold, analysts at Oppenheimer said in a Friday note that they're cutting their WTI oil price estimate for 2019 by 15%, to $61 a barrel. WTI was down 7 US cents to settle at 51.56 dollars a barrel, while Brent dipped 0.27 dollar to close at 60.21 dollars a barrel.
While presumably the advisory board's recommendation buoyed analysts who are optimistic about the cartel slashing production, Stephen Brennock, oil analyst at PVM Oil Associates, stated in a research note published Friday that Russian Federation and the Saudis differ on the need for cuts, and this leaves the kingdom and allied non-OPEC producer facing its "toughest test yet" to find a compromise.
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