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MTECHTIPS:-Oil hits highest since mid-2015 as global producers agree to cut

MTECHTIPS:-Oil hits highest since mid-2015 as global producers agree to cut

MTECHTIPS- Oil rose by as much as 6.5 percent on Monday to an 18-month high after OPEC and some of its rivals reached their first deal since 2001 to jointly reduce output to try to tackle global oversupply and boost prices. Brent crude futures were up $2.21 at $56.54 per barrel by 1125 GMT, having hit a session peak of $57.89, the highest since July 2015. The price is 50 percent higher than at this time last year, marking the largest year-on-year rise on any given day since September 2011. U.S. crude futures were up $2.16 at $53.66 a barrel. “OPEC have taken a very important step towards stopping the relentless build up in global stock levels and speeding up the re balancing process, as long as compliance is strong, Libya and Nigeria fail to rebound and U.S. producers take time to respond,” PVM Oil Associates strategist David Huston said. “As things stand today, no cuts have been made and production is in fact still rising … from a fundamental point of view, it is difficult to justify the front-end price surge other than that is where the liquidity is and where speculative players, moving in herds, always prefer to place their bets.” After nearly a year of wrangling, the Organization of the Petroleum Exporting Countries agreed on Nov. 30 to cut output by 1.2 million bpd for six months from Jan. 1, with top exporter Saudi Arabia cutting around 486,000 bpd to curb the oversupply that has dogged markets for two years.

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