International investor and commodity guru Jim Rogers says crude oil prices could soon head toward $60 a barrel level in the wake of OPEC's deal to cut production.
And to be sure, oil prices surged 4 percent on Thursday, with Brent crude at its highest in about 16 months, extending gains after OPEC and Russia agreed to restrict output to reduce the global supply glut more quickly, Reuters reported.
Benchmark Brent futures settled 4.1 percent or $2.10 higher at $53.94. Earlier in the session, prices jumped as much as 5.2 percent to $54.53 a barrel, the highest level since July 27, 2015.
U.S. crude ended the session at $51.06, up $1.62 or 3.3 percent on the day. Its session high was $51.80 a barrel, 13 cents below its 2016 high.
Rogers told India's Economic Times that oil-market fundamentals are improving. He said supply is going down, exploration activity is falling and reserves worldwide are already declining.
"Nobody in the world has higher reserves now than they had three years ago, except may be the frackers. The frackers cannot make money at these prices," Rogers said.
"Crude prices fluctuate up and down. They have ranged between $40 and $30 and that will probably continue for a while, more likely towards the upside than the downside. Yes, $60 a barrel is not an unusual number. It is still way down from where crude prices were just two years ago," Rogers said.
"One should own energy, as the energy reserves continue to decline worldwide. Saudi Arabia has not had a major find in many years, nobody has. Iraq, Nigeria and Iran nobody has found oil, except frackers. The fundamentals of oil continue to improve," he pointed out.
The Organization of the Petroleum Exporting Countries agreed on Wednesday to its first oil output reduction since 2008 after the group's leading producer Saudi Arabia accepted "a big hit" and dropped a demand that arch-rival Iran also slash output.
The deal also included OPEC's first coordinated action in 15 years with non-member Russia. Azerbaijan said it was also willing to discuss cuts.
Doubts about the historic deal were widespread in the market.
"It remains to be seen how well they stick to the plan, but if OPEC hadn't come to an agreement the probability is that oil prices would have fallen to $40 a barrel, perhaps even lower," said Simon Flowers, chief analyst at consultancy Wood Mackenzie.
To be sure, veteran financial guru Larry Kudlow, who served as the Donald Trump campaign's senior economic adviser, tells Newsmax TV that the oil cartel's glory days have passed.
“I don't care what they (OPEC) do," Kudlow told Steve Malzberg on "America Talks Live." "Our oil and fracking or natural gas makes the United States the most important oil producer and if the price goes up, you'll see all that fracking come back online, supply will increase, the prices will be relatively stable,” he said.
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“I don't care about OPEC," Kudlow, a Newsmax Finance Insider and CNBC senior contributor, said, calling the Organization of the Petroleum Exporting Countries oil cartel "yesterday's news."
“I say the swing producer is the United States. OPEC is dead,” said Kudlow — host of "The Larry Kudlow Show" and author of "JFK and the Reagan Revolution: A Secret History of American Prosperity," written with Brian Domitrovic and published by Portfolio.
(Newsmax wire services contributed to this report).
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