U.S. West Texas Intermediate crude oil surged to the upside on Monday, setting a bullish tone for the week. The catalysts behind the price action were renewed speculative bets on further strength amid the OPEC-led production cuts and a decline in U.S. drilling activity.
The rally continued throughout the week with the futures contract exceeding highs last seen on November 28, 2014, the day after OPEC’s decision to cut production in an effort to trim the excess global supply and stabilize prices. The catalyst behind this move was another weekly decline in crude oil supply.
According to the U.S. Energy Information Administration, U.S. crude inventories fell 4.9 million barrels last week, more than the 3.9-million decline forecast.
Prices continue to rise on Thursday with WTI crude oil rallying to a multi-year high after the United Arab Emirates’ (UAE) oil minister hinted that an alliance between OPEC and non-OPEC producers, including Russia, could continue in some way beyond their current deal to curb oil output.
UAE Energy and Industry Minister Suhail al-Mazrouei told CNBC on Thursday that the OPEC-led plan to cut production is working so it may be extended beyond the December 2018 deadline.
“I am expecting that this group of countries that stood and have become responsible for helping the market to correct, (that) there is a very good chance that they could stick together and put a shape around that alliance,” al-Mazrouei…