Optimism Over OPEC Agreement Sends Oil Prices Higher

Oct 5, 2016

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The oil sector has seen gains recently, reports The Wall Street Journal, and reached a three-month high on Monday.

Prices have been rising on optimism spurred by an OPEC-production deal. After meeting in Algeria, OPEC leaders announced that they would coordinate a reduction of output to 33 million barrels a day.

Whenever the Middle East reduces output, that opens a window of opportunity for U.S. producers. However, some market observers urged U.S. supplier to be cautious. The OPEC deal still has a way to go before it delivers on its early promise. Phil Flynn is a senior market analyst at the Price Futures Group in Chicago. He noted that this is the first time the cartel has agreed to limit production in almost 8 years. Financial services firm Morgan Stanley worried that the agreement may simply be an attempt to settle the nerves of a jittery market.