(May 19 Friday) The price of oil futures rose to a month's high on market demand and expectations of further production output cuts by the major oil producing countries. Analysts are saying that Saudi Arabia and other OPEC member nations, together with Russia are expecting cuts to about 1.8 million barrels per day until the end of March 2018. U.S. producers on the other hand, are not participating on reducing oil production.
Oil prices rallied to start the trading week after Saudi Energy Minister Kahlid Al-Falih announced that Russia and Saudi Arabia are both in favor of extending OPEC and non-OPEC producer deal for 9-months to March 2018. They anticipate the decision to be made on May 25th. The extended oil production cuts will be on the same terms as prior deal.
Oil prices benefited on Thursday, after US crude stockpiles printed the largest weekly drawdown since December. If we do not see another big build in inventories over the next month, we could see prices continue to firm up.
Oil prices traded near a one-month high at the end of last week following the United States missile strike against a Syrian government airbase. The strikes represented the first targeted US military action against President Bashar al-Ashad. US West Texas Intermediate (WTI) crude rallied to an intra-day high of $52.94 before pulling back roughly 90 cents.