Oil Rises 2%,  Hits 18-Month Highs as Markets Eye Output Cuts

 

December 03, 2016

 

Oil prices hit 18-month highs on Tuesday, the first trading day of 2017, buoyed by hopes that a deal between OPEC and other big oil exporters to cut production, which kicked in on Sunday, will drain a global supply glut.

 

Benchmark Brent crude jumped more than 2 percent to a high of $55.24, up $1.52 a barrel and its highest since July 2015. By 1230 GMT, Brent had eased to $58.07, up $1.25.

 

U.S. light crude oil hit an 18-month high of $58.37 up $1.55 a barrel, also its highest since July 2015, before slipping to around $54.95.

 

Oil futures exchanges were closed on Monday for New Year public holidays.

 

Jan. 1 marked the official start of a deal agreed by the Organization of the Petroleum Exporting Countries and other exporters such as Russia to reduce output by almost 1.8 million barrels per day (bpd).