Equityworld Futures, New York – Oil prices edged up encouraged investor optimism about the effectiveness of the continuation of production cuts by OPEC despite the ouput of the United States (US) continues to grow which makes oil stocks increased.
Reuters page launched on Tuesday (02/21/2017), at the end of the session the price of Brent oil futures rose 0.7 percent to US $ 56.18 per barrel. While the price of West Texas Intermediate rose 29 cents, or 0.5 percent to US $ 53.69 per barrel.
Reports pushed oil prices if crude oil shipments from the exporting country member of OPEC, Saudi Arabia fell to 8.014 million barrels per day (bpd) in December compared to November reached 8.258 million bpd.
Oil prices were also slightly raised the weakening US dollar. A stronger greenback usually makes oil more expensive for holders of other currencies.
Organization of Petroleum Exporting Countries (OPEC) and other producers, including Russia, last year agreed to cut 1.8 million barrels per day of oil production started the first half of 2017.
Until now, compliance related to the policy of cutting oil production reached 90 percent. In fact, OPEC reported to extend the agreement or impose greater cuts in July if measures to reduce global inventories of crude oil did not reach the target.
Investors also continued to observe step OPEC members about their commitment to cut production.
For figure cutting reports from Saudi Arabia in December, judged not reflect the full picture.
“Ahead of the agreed production cuts, Saudi Arabia chose not to reduce output because usually this country will be exposed to winter in the middle of the year, so that later in the day can interfere with production cuts agreed measures,” said Commerzbank in a note.
On the other hand, US oil production continues to rise. “Assuming the number of US oil rigs at the current rate, we estimate that oil production will increase by 405,000 (barrels per day) between the fourth quarter 2017 and fourth quarter of 2016,” Goldman Sachs said in a research note.
It was also said, average annual US oil production will increase by 130,000 bpd, exceeding the annual average in 2017.
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