Last Week the Best Oil Rally in Years

The rise is oil prices last week was the best price rally in over 5 years. By Friday oil prices had steadied to $51 per barrel. The price rally is attribution to OPEC’s Nov 30 agreement to limit production to attempt to balance global supply and demand. Russia has record high production in November and plans to use that as a baseline for a produced output reduction in January. The OPEC agreement was the first since 2008 to balance supply, and several non-OPEC oil producing countries are also expected to agree to reduce production. Analysists noted that global oil supply, especially U.S. crude oil inventories are extremely high. Even with proposed production cuts, it will take over a year for crude inventory levels to return to normal.