Oil rose Monday, as news that Saudi Arabia has pledged to lower crude exports and Nigeria plans to limit its production sent prices higher for the first time in three sessions. Chesapeake Energy Corporation (NYSE:CHK) managed to keep its fall at -0.53% on below-normal volume of 14.74 million shares. The stock settled at $4.66 after floating in a range of $4.66 to $4.76. Its latest price was $4.66, reaching market capitalization of $4.10 Billion. Its 52-week range has been $4.38 to $8.20.
September West Texas Intermediate crude CLU7, +1.31% rose by 42 cents, or 0.9%, to $46.19 a barrel on the New York Mercantile Exchange. September Brent crude LCOU7, +1.23% on London’s ICE Futures exchange tacked on 42 cents, or 0.9%, to $48.48 a barrel. Oil prices posted declines in each of the last two sessions.
Analysts once believed an agreement by oil producers to pump less would send crude prices to $60 a barrel in relatively short order. Now, Credit Suisse believes prices won’t even approach that level until 2020.
The investment bank on Monday lowered its long-term price forecast for U.S. West Texas Intermediate crude by $5 a barrel, to $57.50 in 2020. Brent crude, the international benchmark contract, also got a $5 cut, to $60 a barrel in 2020.
The oil market won’t reach a lasting turning point until the third quarter of 2018, according to Credit Suisse. The bank pushed out its expectation for the long-awaited rebalancing of supply and demand until 2019.
Saudi Arabia, which is the world’s largest oil exporter, agreed to limit its exports at 6.6 million barrels a day, while Nigeria also committed to taking part in production cuts if it reaches a production level of 1.8 million barrels a day, according to a report from The Wall Street Journal.
“Saudi Arabia announced its plan to cut exports and this is their way of gluing things back together,” said Bill Baruch, chief market strategist at iiTRADER.