Commodities: Crude zooms north on OPEC-led 'near-unprecedented' output cuts

Crude-oil futures zoomed north on Friday as traders welcomed International Energy Agency (IEA) figures showing near-unprecedented output cuts taking place across the board.

The positive IEA report suggested 90% compliance with OPEC-led output cuts amid a long-standing global glut that has seen prices heavily subdued for a prolonged period.

At 15:04 GMT, Nymex-priced West Texas Intermediate crude was up 1.6% to $53.85 a barrel, while Intercontinental Exchange-traded Brent rose 1.55% to $56.49 a barrel.

FXTM Research analyst Lukman Otunuga said growing optimism over OPEC respecting their pledge to cutting oil output had kept WTI buoyed this trading week.

"Bullish investors received further inspiration to attack on Thursday following reports showing a draw in US gasoline inventories," opined Otunuga.

However, he also noted the rising fear of US shale pumping incessantly, and even undermining the OPEC cut deal could limit upside gains on oil.

"Technical traders may observe how WTI crude reacts to the $54 resistance level with weakness potentially opening a path lower towards $52."

IG market analyst Joshua Mahony said cynicism about OPEC's output cuts was being proved wrong by the IEA report, which revealed "near-unprecedented output cuts" across the board.

He also noted rising demand for the black liquid thanks to greater industrial activity.

"News that these substantial cuts are coming to fruition drove a sharp rise in crude, but this could be for nothing if the cuts aren’t maintained through the coming months," Mahony said.

On Comex, gold was down 0.58% to $1229.6 an ounce, while silver rose 0.19% to $17.78 an ounce and industrial-favourite copper soared ahead 3.54% to 274.75 cents a pound.

Otunuga said that although the yellow metal remained slightly pressured on daily charts, bulls could reclaim control if the $1220 regions defended.

"In the scenario where $1220 is conquered, the next level of interest on gold can be found at $1200," he added.

On London Metals Exchange, three-month copper was down 1.24% to $5822 a MT, with zinc falling moderately as tin and aluminum eked out mild gains.

In the agricultural area, Chicago Board of Trade-priced corn was up 0.88% to 372.75 cents a bushel, while wheat was up 0.45% to 445.5 cents a bushel.

ICE-quoted cocoa fell 1.6% to $1964 a MT, and cotton No.2 firmed 0.56% to 76 cents a pound. Live cattle was up 0.41% to 115.3 cents a pound.