Crude oil gains on optimism OPEC will extend supply cut, softer US dollar

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Crude oil gains on optimism OPEC will extend supply cut, softer US dollar

On Wednesday, the 16th of October 2019, both US and Brent crude rose more than 1 per cent after media reports had revealed that the OPEC+, an alliance of Saudi-led OPEC nations and Russia-led other petroleum exporting countries, would continue to curb production beyond March 2020, while a sharp downturn of American dollar following release of a basket of bleak domestic economic data, had bolstered a crude oil rally further.

As of now, OPEC, Russia alongside other oil exporting countries had agreed to a production cut of 1.2 million barrels of crude per day until March 2020, but latest media headlines had reported that the production cut could extend further amid a stubborn pick up of US crude oil inventory.

In point of fact, Wednesday’s (October 16th) crude oil rally came as a surprise to many, as US crude inventories surged to 432.5 million barrels over the week that ended on October 11th, however, several analysts were accrediting a steep downswing of US dollar behind crude’s Wednesday’s (October 16th) rally.

Meanwhile, referring to an upcoming OPEC meet in Geneva between December 5th and 7th, which would likely to set up a more stable landscape for crude oil futures’ prices during 2020, a vice president of market research at Tradition Energy in Stamford, Connecticut, “You did see the OPEC secretary general say OPEC could act to keep the market stable, and if we come back under pressure again we might see that again. ”