Harry Tchilinguirian, global head of commodity markets strategy for BNP Paribas, argued that the market’s positive response to Saudi Arabia’s new production target is a sign that oil investors are “refocusing on fundamentals” such as supply instead of just responding to macroeconomic factors.

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The Organization of Petroleum Exporting Countries, along with 10 external producers like Russia, also previously agreed to cut output by a collective 1.2 million barrels per day over the first half of 2019 to further ease the global supply glut.

The market is likely to have a better sense of the “overall cohesiveness of the producer group” and the effectiveness of the cuts by the end of January, Tchilinguirian added.

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