Oil Prices Today Hit New Highs After OPEC Agreement

Oil prices today (Monday, Dec. 5) continue to rise after the official OPEC agreement last week. WTI crude oil prices are up 15% since the agreement was announced.

Brent crude oil prices are currently up 1% on the day, trading at $55.01 a barrel, a new high for 2016. WTI crude oil prices today are up 0.5% to $51.93 a barrel and are nearing 2016's high of $53.58, a mark set in early June.

Here's a look at why oil prices are continuing to rise today, and whether the OPEC agreement can keep prices up over the long haul…

Why Oil Prices Today Continue to Rise

Investors are still optimistic after the OPEC agreement was announced last week.

The oil cartel's agreement to cut oil production was its first since 2008 and signaled it was still a viable player in the oil market. By cutting oil production, oil supply will better match demand and force prices to rise.

The chart to the right shows how the price of crude oil surged after the OPEC meeting on Nov. 30. Though prices have continued to climb since then, the chart shows how the OPEC agreement has already created a price floor for oil.

And as Money Morning Global Energy Strategist Dr. Kent Moors has explained, establishing a price floor above $50 a barrel was one of the primary goals of the agreement.

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As long as the agreement remains in place, the cartel should be able to keep crude oil prices above this threshold. But, as Moors says, "the OPEC deal means little if it cannot be sustained long enough to allow the market to rebalance."

And despite rising crude oil prices today, this agreement has a long way to go before it can be called a success…

Will the OPEC Agreement Work?