Brent crude set for longest rally ever on OPEC cutbacks
Oil rose for a 10th consecutive day in London, heading for its longest run of gains on record, as OPEC cutbacks reined in supply while reassurance from the Federal Reserve buoyed the outlook for demand.
Futures returned to a bull market this week after recovering more than 20 per cent from the lows reached in December. Saudi Arabia gave assurances on Wednesday that the production cuts by OPEC and its partners that came into effect this month will be deep enough to prevent any surplus.
Sentiment in the oil market has turned around this week, said Jens Naervig Pedersen, senior analyst at Danske Bank A/S in Copenhagen. The reversal is on the back of a combination of OPEC+ production cuts taking effect, a stabilization in risk sentiment in equity markets and a weaker dollar. In addition, the oil market will be monitoring trade talks, which seem to progress slowly.
Brent for March settlement rose 45 cents to $62.13 a barrel on the ICE Futures Europe Exchange in London. Its climbed 8.9 per cent this week after gaining 9.3 per cent, the most in two years, the previous week. Ten consecutive daily gains would mark the longest rally since the contract started trading in 1988. The global benchmark crude traded at a premium of $8.74 a barrel to West Texas Intermediate for the same month.
WTI for February delivery advanced 52 cents to $53.11 a barrel on the New York Mercantile Exchange. The US crude has also advanced for a 10th day, its longest run of daily gains since 2010, and has added 11 percent this week, the most since December 2016.