On Friday, both Brent and US WTI (West Texas Intermediate) crude oil futures’ prices spiked to their highest level in more than eleven months and secured a weekly percentage gain of as much as 8 per cent as the OPEC-kingpin Saudi Arabia had vowed to a voluntary output cut of 1 million barrels per day until Q1, 2021, in a bid to encourage other OPEC (Organization of Petroleum Exporting Countries) member states to comply with production slashes agreed later last year.
On top of that, strong gains from a majority of global equity indices over hopes of larger stimulus package, ramped up appetite for riskier assets and added to further bullish wing to crude oil’s futures’ prices, since Democrats had secured their controls on both chambers of US Congress under the President-elect Joe Biden who will take over the Oval Office by January 20 as the departing US President Donald Trump had pledged to a smooth transition earlier in the day.
Oil scores 8 per cent in weekly gains on voluntary Saudi output cut
Citing statistics, in the day’s commodity market round off, UK crude oil futures’ prices gained 3 per cent to settle down at $55.99 per barrel, while US WTI crude oil futures’ prices climbed 2.8 per cent to $52.24 a barrel, its highest level since late-February.
In the week, Brent crude oil contracts soared 8.1 per cent, while US WTI crude oil prices had notched a weekly percentage rise of 7.7 per cent. In point of fact, the week’s gain in the crude oil futures’ prices came forth after the Kingdom of Saudi Arabia, the de facto leader of a 14-member OPEC pact, had pledged to an additional production cut of 1 million barrels per day in February and March this year, largely aimed at inspiring other OPEC member states to hold productions steady amid renewed lockdown measures.
Nonetheless, other OPEC nations alongside their Russia-backed allies had resumed a hike in production by 500,000 barrels of oil per day on January 5 as agreed later last year. Meanwhile, addressing to Saudi’s voluntary output cut that led to a strong rise in crude oil contracts’ prices this week, a partner at Again Capital LLC in New York, John Kilduff said, “This week the Saudis stepped up to try to take over the market and took ownership of getting prices stabilized. It seems like they’re on a mission again to get prices back up”.