Oil prices hit a six-week high, due to expectations of extending the period of production cuts

Oil prices continued to achieve their gains during trading today, Wednesday, in the European session, recording the fifth daily gain in a row, to reach its highest level in a month and a half, with increasing hopes about the possibility of extending the agreement to reduce production levels for an additional six months after next June, especially after the news that She responded about the Kingdom of Saudi Arabia mobilizing the support of oil-producing countries for the agreement to reduce production levels, in addition to the decline in US stocks for the second week in a row, according to what was issued by the American Petroleum Institute yesterday.

At exactly 09:29 GMT, US crude rose to reach the price of a barrel at 53.70 dollars from the opening price of the trading session at 53.38 dollars, and the highest price per barrel was recorded at 53.71 dollars, which is the highest in a month and a half, while the lowest price was recorded at 53.34 dollars. Brent, to reach the price of a barrel at 56.60 dollars from the opening price at 56.25 dollars, and the highest price per barrel was recorded at 56.62 dollars, the highest since the beginning of March, while the lowest price was recorded at 56.22 dollars.
US crude oil “May delivery” ended its trading yesterday with gains by 0.6% for the fourth consecutive day, and Brent “June delivery” contracts rose by 0.5%, as a result of market optimism about a certain possibility to extend the agreement to reduce production levels.
There were reports that the Kingdom of Saudi Arabia has gathered support from other oil-producing countries to extend the duration of the agreement to reduce production levels until the end of this year in support of achieving stability and balance for the markets.
It is worth noting that oil producers inside and outside OPEC signed an agreement in December to reduce production levels, bringing the total global reduction rate to about 1.8 million barrels per day, provided that the agreement enters into actual implementation at the beginning of last January.
The TASS news agency reported earlier that Russian Oil Minister Alexander Novak said that his country will start its discussions with oil-producing countries regarding the extension of the agreement to reduce production levels, adding that those consultations are scheduled to begin at the end of this month.
Yesterday, the American Petroleum Institute announced its unofficial report on US inventories. The report showed a decline in inventories by 1.3 million barrels last week for the second week in a row, in contravention of expectations that indicated a rise of 100,000 barrels.
It is expected that the official data on inventories will be released today by the US Energy Information Administration, and expectations show a decline in inventories by 0.7 million barrels.

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Mohamed Abdel Khaleq

A professional technical and economic analyst in global financial markets since 2004. He holds a Master’s in Business Administration from the American University in Cairo. He works as an economic writer and technical analyst for many international financial companies. He writes daily economic and technical analyzes for many Arabic and English websites specialized in the field of stock exchanges and financial markets.

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