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Oil rises for a fifth day as equities stabilise

Reuters  |  LONDON 

By Amanda Cooper

LONDON (Reuters) - prices climbed for a fifth session in a row on Monday, rallying from December's 18-month low thanks to OPEC production cuts and more stable equity markets.

has gained nearly 12 percent since last Monday, its biggest week-on-week rally since early December 2016.

Brent was up $1 at $58.06 a barrel by 1500 GMT, having touched a session high of $58.90. U.S. crude was up 88 cents at $48.84 a barrel.

"Momentum is coming back into the market from very depressed price levels," said. "We've had five consecutive days of price gains already, so what you have today is a continuation of that."

The are drawing support from an agreed supply cut by the Organization of the Petroleum Exporting Countries, as well as some non-member countries such as and

OPEC fell in December by 460,000 barrels per day (bpd) to 32.68 million bpd, a survey found last week, led by cuts from top exporter

The aim of the cuts is to rein in a surge in global supply, driven mostly by the United States, where production grew by nearly a fifth to over 11 million bpd in 2018.

"If compliance by OPEC and the allied non-OPEC countries is similarly high as in the agreement two years ago, the is likely to be rebalanced during the first half year," said in a note.

production has also pushed up U.S. inventories, which rose by nearly 17 percent in 2018 to their highest in well over a year, according to weekly data by the (EIA) on Friday. [EIA/S]

More upbeat equity markets also offered support.

"When stock markets are strong oil usually follows suit," said.

Shares have risen on expectations that trade talks this week between the and will ease a trade dispute. Disruptions to trade undermine prospects for economic growth and [MKTS/GLOB]

said in a note it had downgraded its average Brent forecast for 2019 to $62.50 a barrel from $70 due to "the strongest macro headwinds since 2015".

cut its 2019 for Brent by $9 to $64 a barrel and reduced its forecast for U.S. light crude by $9 to $57 a barrel.

(Additional reporting by in Singapore; Editing by and Jason Neely)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 07 2019. 20:44 IST