Oil Gains Most in Two Years on Stock Rally, Russian Reassurance

Oil slips back towards 18-month lows on oversupply

Oil slips back towards 18-month lows on oversupply

"U.S. equity futures are trading a bit firmer this morning triggering some little buying interest in the oil markets", said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

While economic worries have weighed, the outlook is not as weak as in 2016 when a supply glut built up, because OPEC this time is trying to prop up the market, Jakob said.

The West Texas Intermediate for February delivery rose 3.69 US dollars to settle at 46.22 dollars a barrel on the New York Mercantile Exchange, while Brent crude for February delivery increased 4 dollars to close at 54.47 dollars a barrel on the London ICE Futures Exchange.

OPEC hasn't even started implementing its new six-month agreement to cut output, and already members responsible for most of the reductions have pledged to extend or even deepen it. That follows the United Arab Emirates energy minister's remarks, signaling the producers could hold an extraordinary OPEC meeting and discuss additional curbs if needed.

Futures in NY rose 8.7 percent on Wednesday, the biggest increase since November 2016, amid thin post-holiday trading volume.

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At a press briefing in Kuwait, Iraqi, the U.A.E. and Algerian energy ministers took turns repeating the message that OPEC will deliver its 800,000 barrels per day cut and continue their cooperation with other producers to balance supply and demand. Today at 09:35 AM ET, the global benchmark had recovered slightly, rising 1.34 percent to US$51.45 a barrel, after shedding as much as 6.2 percent in the previous trading session to close at US$50.47 a barrel, Reuters reports. Furthermore, some analysts are concerned over OPEC's ability to coordinate oil policy independently of the U.S.as American shale oil becomes a big global player.

OPEC and allies led by Russian Federation agreed this month to cut oil production by 1.2 million barrels per day from January. Bloomberg quoted a Rakuten Securities analyst as saying, "There are several bearish factors in oil markets, and the situation won't improve anytime soon".

Still, oil prices fell on Friday to their lowest since the third quarter of 2017 as global oversupply kept buyers away from the market ahead of holidays over the next two weeks.

West Texas Intermediate crude for February delivery climbed $1.51/bbl to $44.04/bbl at 9:50 a.m. on the New York Mercantile Exchange. They had slumped 6.7 percent in the previous session to $42.53 a barrel - the lowest since June 2017.

Brent for February settlement dipped $1.39 to $52.43 a barrel on London's ICE Futures Europe exchange.

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