Oil prices surge 5% after OPEC report on production cuts
On the New York Mercantile Exchange oil-futures prices rebouned on Friday after touching a 12-year sag.
On Nymex sweet, light crude oil futures for March delivery came up to $27.48, a 4.9% soar. Additionally, on London’s ICE Futures exchange April Brent grew to $31.52 or 4.9%.
A couple of days ago prices hit a significant low of $26.05. It appeared to be the lowest settlement since May 6, 2003, as the market mainly ignored a dip in weekly American crude-oil inventories. Apparently, oversupply brought prices down for the last two years.
The evident slump in prices got some relief when market participants started covering their short positions. On Thursday, the Wall Street Journal stated that the United Arab Emirates energy minister told that current prices made non-OPEC producers cap output increases.
Market sentiment improved after the UAE energy minister informed that OPEC would like to cooperate as for production cuts, although few really believe the given outcome would come true.
The International Energy Agency as well as the US Energy Information Administration announced this week they actually expect oversupply to last for months, thus keeping oil prices low.