Oil at17-month high

Oil traded near the highest since July last year amid optimism the Organization of Petroleum Exporting Countries (Opec's) and 11 other producing nations will cut output as promised, helping eliminate a global supply glut.
 

Futures rose as much as 0.7 % in New York, advancing for an eighth day in the longest winning streak in almost seven years. Crude inventories should return to equilibrium and prices stabilise, as the agreed cuts go into effect, Venezuelan Oil Minister Eulogio Del Pino said Tuesday on state television. A monitoring committee consisting of some Opec nations and non-members will meet on January 13 to track compliance with promised supply reductions, according to Opec Secretary-General Mohammad Barkindo.
 
Oil has traded near or above $50 a barrel since Opec’s agreed last month to curb production for the first time in eight years. The market is now shifting focus to the group’s compliance toward the targeted reductions. Money managers have trimmed bets on falling West Texas Intermediate crude prices to the lowest level since August 2014 in anticipation of reduced supply.
 
“The market is moving higher in the belief that compliance will be seen,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “We have now rallied about 20 % since late November on the expectation that Opec and non-Opec will deliver the promised cuts. Sooner or later the market will adopt a wait-and-see approach, but not before year-end with so many looking for a high closing price on their books.”

Bloomberg