Crude oil climbed more than 1% today following yesterday’s announcement of an extension of oil production cuts by the Organization of Petroleum Exporting Countries and Russia. The markets’ reaction seems delayed, considering that the commodity did not rally immediately after the announcement. Nevertheless, now traders seem confident that the agreement will be able to continue supporting prices. Adding to the strength of crude oil, as well as other commodities priced in the US dollar, was the weakness of the greenback.
On the negative side, traders remained concerned about the increasing supply from the United States. Baker Hughes reported that the number of US oil rigs increased by 2 to 747 this week.
Overall, investors remained bullish on crude as was demonstrated by the Commitment of Traders report released by the Commodity Futures Trading Commission. It showed that hedge funds increased their bullish bets on WTI crude oil. Meanwhile, data from the ICE Futures Europe showed that money managers increased their long positions on Brent crude as well.
January futures for delivery of WTI oil gained by 1.53% to $58.28 per barrel as of 21:22 GMT on NYMEX today. Futures for Brent grade of crude oil advanced by 1.69% to trade at $63.69 per barrel on ICE.