Oil Price To Hit $70 Per Barrel

Eric Thomas

Eric Thomas

Brent oil has come close to $70/b. [RIG/U] Fatih Birol, head of the Paris-based International Energy Agency, said oil prices at $65 to $70 risked encouraging more oversupply from USA shale drillers."If you look at any kind of momentum indicator this is telling you this is way overbought", said Robert Yawger, director of energy futures at Mizuho in NY. At the same time, worldwide experts now seem to be overwhelmed by mixed feeling about that.

Brent for March settlement advanced to $69.90 a barrel on the London-based ICE Futures Europe exchange at 11:28 Eastern time. WTIfuturescost $63,5/baftergaining 0,8% onthatday.

It's also interesting to note that crude oil prices have increased by 115% over the last 2 years. Asian oil prices are higher than in the rest of the world. If the prediction is accurate, the US would become the top oil producer in the world and beat both Saudi Arabia and Russian Federation for the first time since 1975. So, even though the prices have been growing so far, this is not victory for the OPEC and Russian Federation.

Energy prices have spiked in recent weeks amid speculation that OPEC will curb production in 2018 and re-balance the global oil markets.

Oil remained on shaky ground as a bullish run-up in prices appears to have risk of deflating.

Relatively weak Chinese December oil data weighed on prices, traders and analysts said.

And in addition, oil-burning power plants in New England which rarely get used all year have been running hard, contributing one-third to ISO New England's power generation fuel mix at times. Bloomberg tried to compile those prediction into a single article. It did, however warn that if the United States lifts shale production "dramatically" to around 11m barrels per day, the range could return to $30 to $50 per barrel. The summit ended with extending the OPEC+ deal until the end of 2018.

Oil Price To Hit $70 Per Barrel

OPEC and the non-OPEC countries that agreed to crude oil production cuts in 2017 also agreed to continue limiting output through the end of 2018.

Lower domestic crude oil prices made USA crude oil more competitive in worldwide markets and supported record US crude oil exports. Prices are set for a 3.5% weekly gain.

Trading volumes were higher than average, with a flurry of trades at about 10 a.m. EST as prices jumped.

ICE Commitment of Traders figures showed speculators raised their net long holdings of Brent crude futures and options in the week to January 2 to a new record.

"But if short-term influencers like the Iranian protests and Venezuela production issues were to be sorted out, a sharp price reversal could very well be in the cards".

Q: What will become of global crude oil supply and demand in the mid- to long-term?

For many economies out there, especially those dependent on the export of crude oil, oil prices have always been a major indicator to monitor. Markets remained buoyed by the comments throughout the session, shrugging off data that suggested the USA production may continue to surge. This area, which runs between the states of Texas and New Mexico, is the largest oilfield in the U.S.

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