Oil Tops $55 for First Time in 16 Months as OPEC Deal Fuels Buying
Brent crude oil prices rose above $55 a barrel on Monday, trading at a fresh 16-month high, on rising prospects of a tightening market after OPEC members agreed on a landmark deal to cut production last week.
Monday's gains take the rally since the agreement was struck on Wednesday to 19 percent for Brent, the highest in almost eight years, and 16 percent for US crude.
Brent crude oil futures LCOc1, the global benchmark used to trade oil, soared to their highest since July 2015 to $55.33 a barrel. It last traded at $55.05 a barrel, up 59 cents, or 1.1 percent, at 1133 GMT.
"OPEC sentiment continues to support oil markets.
Speculative short positions are still at elevated levels and as more traders unwind these positions they could trigger more support for oil prices," said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
After members of the Organization of the Petroleum Exporting Countries last week agreed to curb production by a combined 1.2 million barrels per day (bpd) from January, all eyes have now turned to a meeting this weekend between OPEC and non-OPEC producers to expand the deal, Reuters reports.
Non-OPEC producers are expected to agree to add an output cut of 600,000 barrels per day (bpd) at a meeting in Vienna on Dec. 10.
Source: Al Alam