Oil prices were higher on Wednesday, extending gains amid optimism that OPEC will extend an output cut agreement.
U.S. crude gained 0.54%, up 29 cents, to trade at $53.69 per barrel. Brent futures gained 0.64%, up 36 cents, to $56.59 per barrel, also its highest level in a month.
Oil prices were supported by a comment from Saudi Arabia, which indicates that OPEC wants to extend the agreement to cut output for an additional six months at its meeting in May.
OPEC to Meet This Month
A committee of both OPEC and non-OPEC producers will meet in April to offer its recommendations. A final decision will be presented to the joint committee on May 25.
In November of last year, OPEC and non-member producers, including Russia, agreed to reduce output by 1.8 million barrels per day in the first half of 2017 in hopes of reducing a global supply glut. The production cuts started in January and will run until June.
Ongoing U.S. shale production has offset efforts by the agreement.
The U.S. Energy Information Administration will release the U.S.’s official production and inventory figures later today. The American Petroleum Institute on Tuesday said U.S. crude inventories fell unexpectedly by 1.3 million barrels.
Meanwhile, gold prices touched a five-month high after rallying 1.5% yesterday. Prices were supported by ongoing geopolitical tensions, which have sent investors fleeing to safe havens.
Gold for June delivery settled at $1,276.25 by mid-morning after hitting a high of $1,281.75 per troy ounce.
Risk appetite is poor, as investors continue to be concerned about U.S. military action against Syria and North Korea. Fears over the French presidential election have also sent investors to less-risky assets.
Chinese President Xi Jinping called for a peaceful resolution of the heightened tensions in the Korean peninsula. U.S. President Donald Trump, who has called on China to rein in North Korea, said the U.S. is prepared to take action against North Korea with or without China’s help.
Gold prices rise during times of uncertainty. The yellow metal is up 11% so far this year amid heightened concerns of geopolitical tensions.
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