TORONTO – The price of oil settled at US$51.82 a barrel today, its highest level in more than a year.
December contracts for crude, which are the most heavily traded, soared US$1.20 due to several factors including signs that Saudi Arabia foresees an end to the downturn in oil prices.
The last time oil futures contracts hit such levels was on July 14, 2015, when they settled at US$53.04 per barrel.
Today’s settlement price is nearly double the lows seen earlier this year, when a barrel of crude settled as low as US$26.21 in February.
Saudi Arabia’s oil minister, Khalid Al-Falih, spoke at a conference Wednesday in London, where he said the balance between supply and demand is improving.
He said that situation is further strengthened by an OPEC agreement made several weeks ago in Algiers, Algeria, to trim production.
The 14 OPEC members, including Saudi Arabia, agreed to cut production to between 32.5 million and 33 million barrels per day — down from current levels of about 33.2 million barrels daily.
Details of the deal will be finalized during an OPEC meeting next month. Al-Falih said at the conference that many of his colleagues have been discussing production cut targets behind the scenes and some non-OPEC nations are showing a willingness to join those efforts.
The U.S. Energy Information Administration also released its weekly petroleum status report, showing a drop in production.
In the week ending last Friday, U.S. commercial crude inventories fell by 5.2 million barrels from the week before, according to the report.
— With files from the Associated Press
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