Oil stormed back into bull market territory, as investors who’d abandoned crude just a month ago were lured back in by an OPEC-led campaign to bring runaway supplies back in check.
West Texas Intermediate crude closed at $52.36 a barrel, completing a 23 percent recovery since dipping to an 18-month low on Christmas Eve. Brent, the global benchmark, was on track to finish the day up 21 percent from its December low point.
Crude ended 2018 in free fall but has reversed course on signs that Saudi Arabia, Russia and other major exporters will follow through on last month’s pledge to slash production — Saudi Energy Minister Khalid Al-Falih said the plan was on track Wednesday. Progress in ending the US-China trade war has turned the economic outlook brighter, adding to oil’s momentum.
“Everyone’s just focused on the Saudis and they seem quite determined,” said Matt Sallee, a portfolio manager at Tortoise, a Kansas-based money manager with $16 billion in energy investments.
The growing optimism allowed traders to overlook a report of a steep jump in inventories for gasoline and diesel in the US.
The Organization of Petroleum Exporting Countries and its partners vowed last month to curb output by 1.2 million barrels a day to counter booming US supplies. In Riyadh on Wednesday, Al-Falih said that still looks “more than sufficient” to stabilize prices, although he didn’t rule out further action if necessary.