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Oil headed for a third straight weekly gain after OPEC+ surprised the market with a production cut and US inventories dropped.
West Texas Intermediate futures eased below US$80 a barrel, but are still more than 5 percent higher this week.
Monday’s surge was the largest in a year after an unexpected move by the Organisation of Petroleum Exporting Countries and its allies to shave more than 1 million barrels of daily output from next month. Saudi Arabia has since hiked prices of all its oil sales to customers in Asia.
Crude has risen about 25 percent since mid-March, when it collapsed to a 15-month low on the back of a banking crisis that prompted a flight from riskier assets. The move by OPEC+ took out some speculative short sellers, pushing prices higher just as expectations of a recovery in Chinese demand, shrinking US inventories, and a weakening dollar also lifted the commodity’s allure. — Bloomberg.
Online Reporter