West Texas Intermediate (WTI) crude oil futures for delivery in January were 4.8% higher at $53.95 per barrel during Monday’s pre-market trading session while Brent oil futures for delivery in February were up by 4.2% at $56.65 per barrel.
The pre-bell price rise comes as the greenback is higher and following a pledge from a number of oil-producing countries to jointly lower their oil output starting from next year.
At the time of writing, the Dollar Index – which tracks the value of the US currency against a basket of foreign currencies – was 0.28% lower. As a dollar-denominated commodity, a lower US currency tends to make oil more affordable for international buyers.
Over the weekend, a number of oil-producing countries which do not belong to the Organisation of Petroleum Exporting Countries (OPEC) opted to collectively lower their daily oil production by 558,000 barrels starting from January 1st 2017. The agreement came less than a week after OPEC finalised a deal to lower its oil production by 1.2 million barrels per day starting from January 1st 2017. OPEC’s members collectively produce more than one third of the world’s oil.