Oil finally broke its losing streak as U.S. crude futures rose 36 cents to $60.55 on Monday, after Saudi Arabia and its OPEC partners hinted that an output cut could be on the horizon.
After a weekend discussion with all OPEC nations, Saudi Arabia on Monday announced that OPEC and its partners are contemplating an output cut of 1 million barrels per day in the next year. Further, Saudi Arabia, the world’s largest oil exporter, added that it would cut its shipments by half a million barrels per day in December due to seasonal lower demand.
Oil prices fell by nearly 20% in the last month, amidst concerns over increased supply and the threat of a slowdown in demand, especially from countries whose purchasing power has been eroding owing to their currencies weakening sharply against US dollar. Perhaps the tide is turning.