Oil prices hit 18-month high

But doubts have emerged over how effective the cuts will be at rebalancing the market with some analysts skeptical on the ability of major producers to adhere to output limits.

Opec members had agreed to collectively reduce output by 1.2 million bpd beginning in January.

The other risk to the deal is the response of the 40 percent of world oil output not subject to the agreement, with the key swing producers being USA shale drillers. Stocks fell on Monday, Dec. 12, 2016, ahead of a Federal Reserve meeting that is expected to raise US interest rates, while oil prices jumped after several non-OPEC countries agreed to join the cartel in cutting output. Among them are Mexico, which has pledged to cut 100,000 bpd from its daily total; Azerbaijan, which agreed to reduce production by 35,000 bpd; and Oman, which will cut 40,000 bpd from its daily output.

Non-OPEC countries agreed to cut their output by 558,000 barrels a day, after a landmark output cut by OPEC countries at their meeting in Vienna earlier this month.

“I fully understand the “one China” policy, but I don’t know why we have to be bound by a “one China” policy unless we make a deal with China having to do with other things, including trade”, Trump said in an interview with Fox News.

The scale of the turn round explains why Brent prices jumped by more than $7.50 per barrel or 16 percent in the week following the OPEC meeting. The contract was trading at $54.10 at 15:14 p.m.in Singapore.

Those non-member cuts would come on top of an OPEC decision November 30 to reduce member output by 1.2 million barrels a day.

US crude futures settled up $1.33 at $52.83 a barrel, a 2.6 percent gain, though that was sharply off the day’s highs.

Money managers’ short positions in WTI, or bets on lower prices, dropped by 45 percent to 80,285 futures and options, the biggest percentage decline since March 2011. Natural gas, which often rises with expectations of colder temperatures and increased electricity usage, rose last week to its highest price in two years.

“The question which troubles some investors is whether the higher oil price will give the U.S.’s shale oil production a new lease of life”. Viacom fell $2.97, or 8.1 percent, to $35.48, and CBS fell $1.42, or 2.9 percent, to $60.76.

“Markets are taking a breather after a strong run. and Fed risk this week”, City Index research director Kathleen Brooks told AFP. “Inventories are still very high, demand is suspect”.

The Canadian dollar gained 0.21 of a cent at 76.08 cents US. The EIA on December 6 raised its 2017 USA output forecast for a sixth straight month.

The index climbed 2.8 percent to 3,657 points.

The agreement among countries that supply more than half of the world’s oil may speed the anticipated rebalancing of the global market in 2017 and support higher prices. With oil prices already on the rebound following the standing deal to hold output at 32.5 million bpd, the weekend arrangement indicates producers are willing to take extraordinary steps to put a floor under crude.