Oil prices bounced back into the bullish territory, as the West Texas Intermediate (WTI) crude closed at $52.36 per barrel, posting a 23% rise since Christmas where it touched its 18 month low. Brent crude has also surged by 22% since reaching the basal.
The oil prices are in recovery due to the optimism surrounding OPEC+ led production cut. The Organization of Petroleum Exporting Countries in their previous OPEC meeting in December agreed to cut the output by 1.2 million barrels a day, in order to counter the production boom by the USA.
Saudi Energy Minister Khalid Al-Falih said that the production cut looks more than sufficient to stabilize prices. He added, “Responsible countries like the kingdom and other like-minded countries will continue to steward the market.” The trade talk between US-China also fuelled the investors’ enthusiasm.
February delivery of WTI ended the day up by 5.2 per cent ($2.58) and reach $52.36 on the New York Mercantile Exchange. Brent for March settlement also surged by 4.6 per cent to $61.44. The U.S. Energy Information Administration had earlier announced that domestic gasoline stockpiles jumped up by 8.07 million barrels while stores of distillates surged up to 10.6 million.