- Oil remains below three-month highs hit on Friday.
- Some analysts doubt OPEC cuts can boost prices.
- Traders turned bullish following OPEC’s decision to deepen output cuts.
Oil is sidelined below three-month highs hit on Friday likely due to concern reduced production won’t meaningfully curtail supply.
Brent oil is currently trading largely unchanged on the day at $65.30 per barrel, having hit a three-month high of $65.76 on Friday.
The black gold logged gains for the third straight day on Monday but remained below Friday’s high.
Similar action has been seen in the WTI oil, which is currently flatlined around $60.15 per barrel.
In their latest meeting held in Vienna, OPEC members and Russia agreed to deepen the existing 1.2 million barrels per day cut in output by additional 500,000 barrels per day through the end of March 2020.
Some energy experts believe deeper production cuts may not yield desired results.
Indeed, Saudi Arabia has agreed to reduce output by 167,000 barrels a day to 10.151 million, but the kingdom already produces a 400,000 barrels a day less than its previous quota.
Traders, however, have turned bullish on oil following OPEC’s decision to deepen output cuts.
Hedge funds and other money managers bought futures and options equivalent to 154 million barrels in the six most important contracts linked to petroleum prices in the week to Dec. 10, according to Reuters market analyst John Kemp.
That said, prices may face selling pressure if the American Petroleum Institute reports a bigger than expected inventory buildup. The data is scheduled for release on Tuesday.
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