By Sara Israfilbayova
The cost of oil is growing steadily on Tuesday morning as part of the recovery of world stock markets after the fall last week.
Brent crude futures were up 21 cents at $62.80 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were up 6 cents at $59.35, Reuters reported.
The optimism of investors in the commodity market is connected with the rise of U.S. exchanges on February 12. So, the main U.S. stock indexes by the end of the day added 1.4-1.7 percent after the market crash last week. In addition, European stock indices also rose by 1-1.4 percent.
With the gradual stabilization of stock exchanges, the attention of traders shifts to the fundamental indicators of the oil market, which are supply and demand. Against this background, investors are waiting for data from the American Petroleum Institute (API) and the U.S. Energy Department for weekly stocks of “black gold” in the country.
Analysts predict that the U.S. Energy Department will report an increase in oil reserves in the country for the week ended on February 9, by 2.6 million barrels after growing by 1.895 million barrels a week earlier.
Meanwhile, the President of the Organization of Petroleum Exporting Countries (OPEC) and United Arab Emirates (UAE)'s Energy Minister, Suhail Al Mazrouei, has stated that the increased production of shale oil by the U.S. will not hamper the efforts of OPEC and non-OPEC countries to clear the glut in the oil market.
Speaking in an interview in Dubai on February 12, AI Mazrouei disclosed that the oil market should re-balance this year, given robust demand and producers’ compliance with their pledges to curtail supply.
He noted that the U.S. shale oil won’t be a “huge distorter” for the oil market as stronger demand and compliance with oil cuts have buoyed prices.
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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