Oil rose to more than $52 a barrel on Monday morning to hit a three-week high after Russia and Saudi Arabia back supply cuts until at least 2018. The news indicates a potential extension of the current OPEC oil supply cuts in hopes of forcing oil prices higher.
Russia and Saudi Arabia’s energy ministers stated that supply cuts need to be extended for an additional nine months at least until March 2018. The duration is three months longer than the six-month optional extension in the OPEC agreement.
Brent and Crude Oil Rises
Brent crude is up to $52.23 per barrel in early morning trade. U.S. crude oil is also up nearly 3% to trade at $49.26 per barrel. OPEC members, Russia and other producers originally agreed to cut back on production by 1.8 million barrels per day, with an optional six-month extension in production cuts.
U.S. drilling activity increases has impacted the production cuts.
Meanwhile, North Korean tensions helped support gold prices on Monday morning, as the U.S. dollar weakened following a North Korean missile test. Gold futures are up 0.51% to $1,233.98 a troy ounce on Monday. Lackluster U.S. retail sales and inflation levels helped push the yellow metal to its third straight day of gains in Friday.
The US dollar index is down 0.30% on the day to 98.75 against a basket of six major currencies.
Investors are waiting for a potential rate hike in June, with weak retail data pushing the likelihood of a rate hike from 80% to 70% at the end of last week.
Silver futures are up 2.07% to trade at $16.738 a troy ounce. Platinum prices hit a two-week high on Monday, rising 2.11% to $936.85 a troy ounce. Copper is up 0.78% on the day to trade at $2.543 per pound.
China’s pledge to spend $124 billion in financing for the country’s infrastructure mega-program helped support industrial metals.