Oil gains on hopes that OPEC+ likely to maintain production cuts
Oil prices climbed on Monday on expectations that OPEC+ may limit output at current levels starting February at a meeting later in the day. This was decided as the coronavirus pandemic heightens concerns about oil demand in the first half of the year.
Brent crude for March contract rose 1.2%, or 62 cents, at $52.42 per barrel. U.S. West Texas Intermediate crude for February delivery gained 1.1%, or 55 cents, at $49.07 per barrel.
Wider macro momentum trends, which include a weak dollar and investors betting on a demand recovery could boost oil prices.
OPEC said that while oil demand is anticipated to rise by 5.9 million bpd to 95.9 million bpd this year, there are risks to the first half of 2021.
Prices closed 2020 nearly 20% below 2019’s average, still improving from the effect of global lockdowns implemented to contain COVID-19. The restrictions cut fuel demand despite major production cuts implemented throughout the year.
Meanwhile, U.S. crude oil production fell over 2 million bpd in October, according to a government report posted on Jan. 1.