03 Jan Global oil prices rise as new year OPEC agreement is implemented
US West Texas Intermediate (WTI) crude oil prices increased on the first day of trading in 2017, reaching US$54.07, up 35 cents (0.7%).
This reflects a positive start to the year for global oil markets, on the back of the biggest annual gains in the industry since 2009, with the landmark agreement by oil producing nations to reduce production levels set to be initiated over the year.
The deal between OPEC members and 11 other oil producing countries was reached in late 2016 and came into effect on the opening day of 2017, and has already seen Kuwait honour the agreement.
The Middle Eastern gulf nation has cut production by 130,000 barrels per day (BPD), whilst Russia also prepares to slash its production levels by 300,000 BPD.
However, the US added active rigs for the ninth consecutive week and Libya, exempt from the deal, increased its production to 685,000 BPD.
Ric Spooner, a chief market analyst at CMC Markets in Sydney said: “If we see ongoing evidence of the production cuts, it will have a positive impact on the market.”