Crude has kicked off 2019 in rally mode after torrid performance last year, Financial reports
Oil rose on Monday, marking an increase of more than 8 percent since the beginning of the year, as the market absorbs cuts in OPEC production that come into force this month.
Brent, the international benchmark, rose by around 2 percent on Monday morning to $58.21 a barrel, continuing a string of rises since the new year, which last week saw it book its largest weekly increase since mid-2017.
The rise follows a slump in December to 15-month lows amid concerns about a global economic slowdown as the US Federal Reserve chose to maintain its gradual interest rate policy, dragging down equity markets as well as crude prices.
“We’re rebounding from very weak levels and a lot of pressure at the end of last year,” said Olivier Jakob at Swiss oil consultancy Petromatrix, according to FT.
“The OPEC cuts start now in January so you’re going into a period where Opec will manage supplies to tighten or balance the crude market. So, there is some repositioning from that, but you are also coming from very weak levels,” he added.
West Texas Intermediate crude, the US benchmark, also rose 2 percent on Monday morning to $48.93.
Worries over the state of the global economy had been fuelled by tensions between the US and China. But the world’s two largest economies on Monday started their first formal talks since the beginning of a three-month truce in their trade war.
The two day meeting contributed to a rally in global stock markets and sparked hopes that oil could continue its recovery.
“If we can have a little bit of support from the stock market, the target is now to see if we can move back to $50 WTI and $60 Brent,” FT quoted Mr Jacob as saying.