West Texas Intermediate (WTI) crude oil futures for delivery in January were trading 0.5% higher at $51.16 per barrel during Friday’s pre-market trading session while Brent crude futures for delivery in February were 0.8% higher at $54.46 per barrel.
The pre-bell price gains coincide with a lower greenback. As a dollar-denominated commodity, a lower US currency tends to make oil more affordable for international buyers. The Dollar Index, which tracks the value of the US currency against a basket of foreign currencies, was 0.19% lower at the time of writing.
The gains form part of an overall trend which has seen oil prices more or less steadily increasing since the Organisation of Petroleum Exporting Countries (OPEC) elected to lower its oil output by 1.2 million barrels per day starting from January 1st 2017 at a meeting held on November 30.
The decision marked the first such arrangement in almost a decade and followed two years’ of overproduction which had eroded the price of the hydrocarbon commodity. OPEC members collectively generate more than one third of the world’s oil supplies and, as a result, major decisions regarding production levels made by the organisation tend to have an influence on trading prices. In addition to OPEC members’ agreeing to cut output, a number of key non-OPEC oil producing nations, including Russia, collectively agreed to lower production by 558,000 barrels per day also starting on January 1st.