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Oil hits 11-month high with production cut promise and high inventory data

by Bunkerist
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Oil prices hit an 11-month high on Friday. Oil is on its way to a strong weekly gain, with Saudi Arabia’s promise to cut oil production as the rise in global stocks feeds the appetite for risk.

Brent crude climbed 39 cents, or 0.7%, to $54.77 a barrel by 0757 GMT, after touching $54.92, the highest since Feb. 26.

West Texas Intermediate (WTI) gained 33 cents, or 0.7%, to $51.16. The contract also touched its highest since Feb. 25 at $51.34 earlier in the session.

Both benchmarks are on track for weekly gains of more than 5%.

Strong global stocks, backed by excess liquidity, also brought new oil purchases with it. However, a serious recovery in the oil and stock markets can be seen when fuel demand does not affect the global economy.

Earlier this week, Saudi Arabia, the world’s largest oil exporter, said it would cut production by another 1 million barrels a day in February and March.

Estimates for Brent rose to $ 60 a barrel by mid-year, following Saudi Arabia’s unilateral discount, a revival in travel with the launch of coronavirus vaccines and a recovery in demand in the second quarter.

Asian shares hit a record high on Friday. Investors watching the probable economic recoveries for the following months in the year, despite rising coronavirus cases and political unrest in the United States. Japan’s Nikkei hit a three-decade peak.

Oil markets are expected to remain in a bullish tone until February due to Saudi Arabia’s promise to cut surprise production.

However, concerns about slow demand for gasoline and other fuels in the United States and other parts of the world due to wider restrictions to contain the spread of the COVID-19 epidemic may limit gains.

While the outbreak killed more than 4,000 people in a single day, declaring the highest death rate in the United States, China reported the highest increase in daily cases in more than five months, and Japan could prolong the state of emergency.

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