Driven by sharp movements in currency markets, the commodity is enjoying an upward trend. Additionally, OPEC’s efforts to drive the supply of the commodity down is edging the price upwards. Bullish tones should continue given modest supply cuts from OPEC and non-OPEC producers.
Nigeria was the leading OPEC member to cut production, curtailing output by 230k barrels per day. Iraq, Iran, Saudi Arabia and Venezuela reduced production of up to 60k barrels per day? On the other hand, Libya’s production for the month has risen 50k. Non-OPEC member, Russia, has not made changes to their output, remaining at 11.2 million in December.
The market seems confident that OPEC and non-OPEC members will stick to these production cuts and are placing bullish bets on energies including; Brent, Gasoline, Natural Gas and Heating Oil.
China’s demand for the commodity is rising. Crude oil imports rose to record highs in December, stepping up purchases before prices rise further. According to the Chinese General Administration of Customs, 8.57 million barrels per day were imported in December, up 9% from November.