Oil Prices Surge on OPEC+ Optimism
Optimism Boosts Oil Prices
Oil prices soared to near four-month highs, driven by increasing optimism surrounding tighter global supply dynamics ahead of the upcoming OPEC+ decision next week.
Strong Rally in Futures Market
By 14:30 ET (19.30 GMT), oil futures settled 2.2% higher at $79.97 a barrel, briefly surpassing the $80 mark intraday for the first time since November 7, 2022. The Brent contract also climbed 2.1% to $83.94 a barrel, marking a two-month winning streak.
Anticipation for OPEC+ Decision
Market attention is now focused on OPEC+ as they are expected to announce their decision on extending production cuts next week. This move comes after the successful agreement of about 2.2 million barrels per day cuts in November, fueling hopes for a tighter global oil supply ecosystem.
Expansion in Rig Counts
The number of oil rigs operating in the U.S. saw a rise to 506, the highest since September. This increase indicates a gradual recovery in domestic refining activities post weather-related disruptions. Despite this uptick, rig counts remain below the levels needed to sustain current production levels.
Production and Consumption Dynamics
In December, domestic oil production slightly decreased to 13.315 million barrels per day from November’s record high of 13.314 million barrels per day. This shift reflects the delicate balance between supply and demand dynamics currently influencing the oil market.
The rising oil prices underscore the industry’s resilience amid evolving market conditions, with anticipation and speculation driving the narrative towards a more sustainable and balanced oil market in the coming months.
