The announcement follows an agreement last week from the Organization of Petroleum Exporting Countries to extended output cuts through the end of 2018. However, the United Arab Emirates has warned that OPEC could end curbs in June if the market is no longer oversupplied by then.
There is the “expectation of tighter markets as 2018 unfolds,” Bart Melek, head of global commodity strategy at TD Securities, told Bloomberg. “Certainly at Vienna, they’ve implied that they will be flexible. If the market rebalances, then we would expect somewhat looser rules.”
In addition, the WTI-Brent spread will “widen and encourage U.S. exports,” Yawger added.
The United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, was 0.8% higher Monday as WTI futures increased 0.8% to $57.8 per barrel.
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