By Fareed Rahman
Senior Reporter
Abu Dhabi: Oil prices surged to their highest level since mid-2015 stirring a jump in the UAE equity markets, with Dubai’s main equity index jumping 2.8 per cent and Abu Dhabi Security Exchange General Index rising by 0.71 per cent on Monday.
Oil prices rallied following the agreement on Saturday by non-Opec (Organisation of the Petroleum Exporting Countries) to cut production by 558,000 barrels per day. This is on top of the 1.2 million barrels per day production cut agreed to by Opec on November 30.
Global benchmark Brent Crude was up by more than five per cent to touch $57.89 per barrel, but later fell to $56.16. US crude Texas Intermediate was trading around $54 per barrel.
The outlook for oil prices remains positive with analysts predicting oil price to increase further in the coming days.
“The fact that an agreement has been reached brought additional relief to oil markets. Saudi’s announcement about the possibility of implementing additional cuts also helped,” Francisco Quintana, head of strategy at Foresight Advisors told Gulf News. “The outlook for oil prices next year remains positive, although I believe most of this year’s reaction has already taken place and prices will remain below $60 per barrel before year-end.”
Bank of America Merrill Lynch in a note predicted Brent crude oil to average $61 per barrel in 2017 and West Texas Intermediate to average $59 per barrel over the same period.
