Oil prices
jumped on Friday as evidence increased that producers in the Middle East were
informing customers of upcoming supply cuts as part of a coordinated effort to
drain a global glut. Brent crude futures were trading at 54.11 dollars per
barrel, up nine cents from their last settlement. U.S. West Texas Intermediate (WTI) crude was up 18 cents at 51.08
dollars per barrel.
Oil producers, including Kuwait, Saudi Arabia, and Abu Dhabi, who are key members of the Organization of the Petroleum Exporting Countries
(OPEC), have started notifying customers. They are telling customers that
they would cut supplies from January as part of an effort by OPEC and other
producers led by Russia to rein in a global fuel supply overhang and prop up
prices.
“These
greater projected cuts and our strong demand growth forecast lead us to
forecast a normalisation in inventories and backwardation across the forward
curve by next summer,” Goldman Sachs said on Friday. ‘Backwardation’
refers to trading where oil for future delivery is cheaper than that for
imminent delivery. (Guardian)
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