The oil price looks optimistic. What are the reasons?
Crude holds revenues as oil producers ascertain market rebalancing
On Monday, crude prices were nearly intact, keeping most of their revenues from the previous trading session to hold close to their highest outcome in months. It’s because key producers meeting in Vienna told that the market was successfully making its way towards rebalancing.
OPEC, Russia as well as several other oil producers have reduced their output by nearly 1.8 million barrels a day since the beginning of 2017, thus helping to raise crude prices by nearly 15% for the last three months.
Essam al-Marzouq, Kuwaiti Oil Minister, who chaired Friday's gathering of the Joint Ministerial Monitoring Committee, told that supply cuts were assisting to reduce global oil inventories to about their five-year average, which is OPEC's stated objective.
November delivery Brent crude futures slumped just 3 cents being worth $56.83 a barrel in London. They approached the highest outcome since March.
Meanwhile, November delivery US crude futures slumped 8 cents trading at $50.58, having soared 0.2% on Friday.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.