LONDON: Oil hit an 11-month high towards $57 a barrel on Tuesday as tighter supply and expectations of a drop in US inventories offset concerns over climbing coronavirus cases globally.
Saudi Arabia plans to cut output by an extra 1 million barrels per day (bpd) in February and March to stop inventories from building up. The latest US supply reports are expected to show crude stocks fell for a fifth straight week.
Brent crude was 75 cents, or 1.4 per cent, higher at $56.41 a barrel by 1022 GMT and earlier hit $56.75, the highest since last February. US West Texas Intermediate (WTI) gained 86 cents, or 1.7 per cent, to $53.11.
“Saudi Arabia, in particular, is ensuring through its additional voluntary production cuts that the market is undersupplied if anything,” said Eugen Weinberg of Commerzbank. — Reuters
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