Amid global scale oversupply, it appeared that nothing much was going to happen with the oil price before the agreed output cut could take place, and the dithered oil price would not provide a clear direction, as it had been whirling on a tight range between, $50.45-$51.55, yet, in the face of a new evidence showing US inventory decline, the oil price soared over 2% on Thursday, December 13th.
As the new evidence emerges, the investors have again started to bet on the fact, that the market might experience a deficit much sooner than previously anticipated. The OPEC alongside, Canada and Russia had reached an output agreement on December 7th, a Saturday evening in Vienna, to mandate the production cuts.
According to the International Energy Agency, even if the top producers stick to the deal (which is highly unlikely to happen, as already Russian producers declined to cut output regardless of OPEC agreement result), the crude oil market could experience a deficit by the second quarter of the year.
On Thursday, December 13th, the Brent Crude settled at $61.45 a barrel, squeezing a 2.16% gain and the US crude rose 2.8%, closing the session at $52.58 per barrel. As the recent data from market intelligence firm Genscape showed, the US crude fell nearly 8,22,000 barrels and jolted the oil price slightly higher out of nowhere.