Crude oil futures have spiked in early trade on Monday, finding support on reports that Saudi Arabia will cut production levels in December.
The move is likely designed to stop the slide in crude prices which had recently fallen over 20% from early October, leaving them in a technical bear market.
“Saudi Arabia has stepped in front of the Oil market bears proactively announcing they will reduce exports by 500,000 barrels per day in December,” says Stephen Innes Head of Trading Asia-Pacific at OANDA.
“Oil prices above $80 are never welcome by OPEC customers, and that seems to be a similar consensus among OPEC, non-OPEC and US producers.
“However, producers are concerned that the latest selling frenzy could see Brent oil reach $60 or below. So, it’s in OPEC’s best interest to tame the current supply glut.”