By Sara Israfilbayova
Oil prices are jumping on Monday after a strong Friday decline due to recovery in the stock markets.
Brent crude futures were at $63.54 per barrel, up 1.2 percent, from the previous close, U.S. West Texas Intermediate (WTI) crude futures were at $60.04 a barrel. That was up 84 cents, or 1.4 percent, from their last settlement, Reuters reported.
The stronger prices came after crude registered its biggest loss in two years last week as global stock markets slumped.
“The bounce in U.S. stocks means some catch-up is possible (for oil),” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
Data of Baker Hughes, released on February 9, pointed to the maximum since January last year, an increase in the number of operating oil rigs in the U.S. over the past week, which raised concerns about the growth in production in the country.
The number of such installations has increased for the third week in a row - by 26 units, to 791 installations, Baker Hughes reported.
“This is preparing the ground for increasing oil production in the U.S. this year by more than 1 million barrels per day, but this requires that oil prices remain above $50 per barrel,” quotes MarketWatch analyst WTRG Economics James Williams.
According to the Energy Information Administration (EIA) of the U.S. Energy Department, published last week, U.S. oil production this year will average 10.59 million barrels per day.
OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.
Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.
OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.
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