Oil is growing in anticipation of the negotiations on the reduction of oil production
On Wednesday the oil contracts are becoming more expensive while the investors are waiting for the end of the negotiations among the OPEC countries and the countries outside the cartel. The negotiations are focusing on limiting the production in order to negate the oversupply in the global market. On Wednesday morning oil contracts cost $ 52.66 per barrel. This is more than the mark of the previous session closing by 0.48 percent.
Oil contracts for WTI crude oil have jumped by 0.33 per cent, amounting to $ 50.96 per barrel. Black gold has increased in price by more than 13 percent over a period of less than two weeks. The oil started to grow from the date when the OPEC proposed to cut the production for the first time over 8 years. Meanwhile, the prices have been fixed at the indicators, which are less than a half of the maximum indexes of the mid-2014. The prices are above $ 100 per barrel, as the prospect of the market return to the balance remains hazy.
On Wednesday the state-participants of the OPEC will meet at the negotiations with producers of raw materials that are not members of the cartel in order to discuss the details of the international agreement on the reduction of oil production at least for 6 months. Russia has supported the plan.
The global supply and demand of oil may soon come to a balance if the OPEC and the Russian Federation are able to agree on a significant reduction in the production volumes. However, according to the International Energy Agency (IEA), it has not been clear yet how soon it happens.
Also, on Tuesday the experts at Goldman Sachs said that despite the fact that there was “an increased likelihood” of the agreement on the reduction of oil production by the OPEC members and exporters outside the cartel, including Russia, it wouldn’t be enough in order to balance the market in the upcoming year.