Nevertheless, Staunovo added that overall “I would think oil prices are in a position of stabilizing around this level” as the Organization of the Petroleum Exporting Countries and its allies outside the cartel, including Russia, plan on cutting production to stabilize prices.

The oil cartel and its allies are expected to reduce oil production by 1.2 million barrels per day next year, which should help soak up the global supply glut.

The International Energy Agency said Thursday that commercial oil stocks in the Organization for Economic Cooperation and Development rose by 5.7 million barrels in October to 2.872 billion barrels, the first time commercial petroleum inventories were above the five-year average since March.

“It will be chiefly up to OPEC, and Saudi Arabia above all, to bring the oil price under control by complying strictly with the agreed production cuts,” analysts at Commerzbank said in a note. “Saudi Arabia therefore intends to reduce U.S. exports in the short term.”

For more information on the energy sector, visit our energy category.

Subscribe to our free daily newsletters!
Please enter your email address to subscribe to ETF Trends' newsletters featuring latest news and educational events.