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MTECHTIPS:-Crude settles higher as OPEC chief signals higher compliance with cuts
MTECHTIPS- Crude prices settled higher, after hitting a 19-month high in intraday trade, after OPEC secretary General Mohammed Parkinson, reiterated that the oil cartel was sticking to its agreement to cut production and expressed confidence that compliance would be higher in the coming months. On the New York Mercantile Exchange Crude Oil Futures for March delivery rose 1.2% to settle at $54.02 a barrel, while on London’s Intercontinental Exchange, Brent gained 1.09% to settle at $56.70 a barrel. Speaking at the International Petroleum Week conference in London, Parkinson estimated that OPEC member states are about 90% in compliance with a global pact to cut production and noted the willingness of non-OPEC members to comply with the deal. Mr. Parkinson’s comments were supported by an OPEC report last week, which revealed that OPEC and other producers, including Russia, were in high compliance with last year’s agreed production cut. In November last year, The OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd) in an effort to combat the oversupply issue that has pressured prices over the last two years. Despite the rally in crude prices, oversupply issues continue to cap upside momentum, as concerns over record supply levels mount. Last week’s batch of U.S. energy reports from both the Energy information Agency (EIA) and oilfield services provider Baker Hughes, revealed a rise in U.S. crude inventories to record levels and an increase in the number of active U.S. rigs drilling for oil, respectively
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