Oil surged Tuesday in thin pre-Christmas trading after Russia’s energy minister stated cooperation with OPEC to support the market would proceed, and analysts forecast a second weekly decline in U.S. crude inventories.
Brent crude was up 12 cents, i.e., 0.2%, at $66.51 per barrel. U.S. West Texas Intermediate was 7 cents higher at $60.59 each barrel.
OPEC, Russia, and other countries that have linked as much as curtail production and help prices will proceed with their cooperation as long as it’s “efficient and brings outcomes,” Russian vitality minister Alexander Novak said in an interview Monday.
OPEC and other producers agreed in November to deepen production cuts in place since 2017. The reduction of production could see up to 2.1 million barrels per day taken off the market or about 2% of global demand.
Still, OPEC must do more to offset the market on a sustainable basis, Bjornar Tonhaugen, head of oil market research at Rystad Energy, stated in a note.
U.S. producers have been happy to fill any voids in the market, pumping ever more significant quantities of crude to reach a report high of around 13 million barrels per day in November.
That has helped swell stockpile, which has been stubbornly resistant to drawdowns. U.S. shares are up around 1% this year.
Crude shares are, nonetheless, anticipated to have dropped by about 1.8 million barrels last week, the second week of plunge, based on a preliminary poll.
Nonetheless, gasoline shares are expected to have soared for a seventh straight week, and distillate inventories are estimated to have gained for a fifth consecutive week.
On the trade grounds, a settlement between China and the U.S. on ending tit-for-tat tariff hikes appears to be on track, helping assist oil costs. The settlement is due to be signed in January.