By Adedapo Adesanya
Oil prices recovered from last week losses on Monday as new reports suggested that the Organization of the Petroleum Exporting Countries (OPEC) and its allies may agree to deepen output cuts at a meeting scheduled to hold this week.
On the back of this, the International benchmark, Brent crude futures traded up at $60.96 per barrel after gaining 47 Cents or 0.78 percent, while the WTI crude rose to 56. 01 per barrel, gaining 84 cents equivalent to 1.52 percent.
It has been in circulation that the cartel and its allies, when oil ministers meet in the Austrian capital city of Vienna on December 5 and 6, will discuss the necessary issues concerning oil supply in 2020.
Latest reports hint that the cartel led by non-OPEC Russia are expected to extend output cuts this week and this could see a cut of additional 400,000 barrels per day (bpd) or more, CNBC stated citing two sources.
The cartel and its allies had earlier in January agreed to cut production output by 1.2 million barrels per day in a deal that would run till March 2020 but recently there were talks that the producers including Russia would extend this till June next year, however, some members in the group are wary measures to support prices will support more US production.
Business Post had reported last week that an information from government noted that US output in September increased to a record 12.46 million barrels per day.
According to market analysts, a decision by the group to deepen production cuts will do well for oil prices and curb expected oil glut expected in 2020.
Oil prices also rose on Monday as factory activity in China unexpectedly returned to growth in November for the first time in seven months.
According to China’s National Bureau of Statistics (NBS), the Purchasing Managers’ Index (PMI) bounced back to 50.2 in November, its highest since March compared with 49.3 in October.
Oil prices are expected to continue gains this week as the OPEC meeting draws closer.
Dipo Olowookere