Oil prices rebound after record losing streak as producers mull supply cut
Oil prices have bounced back bringing an end to the commodity's longest losing streak since records began as producers prepare for supply cuts.
Crude prices had fallen for 12 consecutive days losing more than 25 per cent of their value as supply surged and demand faltered.
But major oil producers, such as Saudi Arabia, have suggested cutting production in the coming months causing prices to rebound.
The world's largest oil producers are set to meet in Vienna next month to discuss quotas.
Brent crude rose two per cent to $66.83 per barrel and WTI crude climbed to 1.7 per cent to $56.67, after both fell seven per cent yesterday.
The International Energy Agency, which urged nations to increase production in August sparking a four-year high in prices in October, also said supply cuts may be needed to bring about market stability.
In August the energy authority encouraged producers to increase supply as impending sanctions on Iran and falling production in Venezuela could lead to prices rising “too high too fast”.
Brent crude rose to a four-year high of $86 per barrel before producers heeded the warning and boosted supply.
In a monthly market report the IEA said: “Lower prices are clearly a benefit to consumers, especially hard-pressed ones in developing countries that are suffering from the additional handicap of weak national currencies.
“We should also recognise the interests of the producers. For many countries, even though their output might have increased, prices falling too far are unwelcome.”
The oil price slump quickened yesterday before its conclusion today, after Donald Trump warned Opec countries against cutting production.
Earlier this week Saudi Arabia announced it would cut production in December by 500,000 barrels per day in a bid to put an end to the unprecedented losing streak.
Deutsche Bank strategist Jim Reid said: “We went through our archives yesterday and found a bit more daily data back to 1977, and we still can't find a losing run of this magnitude.”