Oil prices improve as crude market continues to tighten
Oil prices have increased for the third consecutive day amid stronger indications that the crude market is gradually tightening following years of oversupply.
Brent crude futures climbed 8 cents to $56.69 a barrel, while the US West Texas Intermediate (WTI) crude futures gained 14 cents to $51.06, reported Reuters.
Traders stated that all short-term conditions that influence the market are tightening.
Oil prices also gained support by the International Monetary Fund’s prediction that global economic growth is expected to be 3.6% this year and 3.7% next year.
Barclays bank was quoted by the news agency as saying: "Inventory draws will likely cause the market to refocus on geopolitical risks and low levels of spare capacity.”
The bank further added that by the end of this year Brent is expected to average around $53 per barrel, which so far averaged $52.70.
It also stated that prices may fall again in the second quarter of the next year to $48 a barrel when the oil output is expected to surge again.
OPEC and other producers that include Russia have agreed to reduce output by 1.8 million barrels per day (bpd) to revive the oil prices.
The deal is scheduled to end in March next year, but may potentially be extended further.