Oil price climbs almost 5% after Saudi-Russia agreement, US-China truce
The price of Brent crude started recovering from a sharp drop in November, jumping 4.7% in the past week
Oil prices are recovering after the biggest monthly drop in 10 years. After Saudi Arabia's Crown prince Mohammed bin Salman and Russian President Vladimir Putin agreed to extend their agreement on oil production cuts ahead of OPEC talks in Vienna on December 6.
Oil prices dropped by about 30% after hitting four-year highs in early October, with the drop spurred by worries of falling demand and potential oversupply.
As such, a series of recent events helped improve optimism about the outlook for the oil market. Russia's agreement with Saudi Arabia has renewed confidence that OPEC will be able to reach an agreement at its Vienna meeting. An announcement from Canada that it would cut production in Alberta by 325,000 barrels per day also helped prices, and the US-China trade war truce pushed a more optimistic market sentiment.
OPEC's plan for production in 2019 still remains to be seen, and details are not yet available, although an OPEC advisory body said a cut of 1.3mn bpd would balance the market in 2019, according to Bloomberg.