Crude oil is at a crucial three-month high.
The OPEC + countries efforts to halt the downslide in the oil market have worked. Now crude oil prices are at a three-month high. This is the longest upward hike after a long time. However, on Wednesday, oil prices seem to have lost their steam.
The production cuts from Saudi Arabia and other oil producing countries have put an end to the supply gut, which was pulling the prices of crude oil down.
The trade negotiation that is going on between the U.S. and China gives some hope to the world, that things will get back to normal. The tariffs imposed by the U.S. on Chinese imports and the retaliatory tariffs imposed by China on American efforts have hit the two countries badly. It has also impacted the global economy which is facing a slowdown across many countries, which in turn has brought down demand for oil.
However, U.S. oil prices have gone up to a three-month high on Tuesday. West Texas Intermediate futures were trading at $56.09 per barrel, which was an increase of 0.9 percent on the New York Mercantile Exchange. This is the highest close after November 19. The increase has been for five consecutive sessions. But WTI for March delivery has slipped to $55.71 per barrel on the NY Mercantile Exchange in London, as it slipped by 38 cents.
With higher production from U.S. shale inflow, there was a slump in the oil market prices. The OPEC countries had to cut their production supply to halt the slide in prices. After the production cut, crude oil has risen by 23 percent from last year.
Further, the sanction on Venezuela has also resulted in higher demand and hike in crude oil.
Though the OPEC + countries agreed to cut production, only 10 nations out of 21 have fully complied with the cut in supply of crude oil.