Iran disruption pushes up oil prices to strongest year starting since 2014
Amid large anti-government rallies in Iran and also recent supply cuts carried out by OPEC and Russia, on Tuesday, oil prices showed their strongest opening to a year since 2014 with crude increasing to mid 2015 highs.
After hitting $60.74, the American West Texas Intermediate (WTI) crude futures CLc1 were registered $60.63 with a barrel at 0747 GMT, rose 21 cents or 0.4 % earlier in the day which was highest since June 2015.
While the international benchmark, Brent crude oil futures LCOc1 were at $67.18 a barrel, increased 31 cents or 0.5 % after successful May 2015 with huge amount of $67.29 a barrel earlier in the day.
Since January 2014, it was the first time when the two crude oil benchmarks opened the year over $ 60 per barrel.
Iran unrest increases crude oil prices to greatest opening of the year
Growing disorder in Iran set the table for a bullish beginning to the year 2018, the American report said in a note on Tuesday. Even without chaos in Iran, which is a biggest oil exporter, the market sentiment was cheerful.
The senior market analyst at futures brokerage Oanda, Singapore, Jeffrey Halley said that, “Falling inventories worldwide and meanwhile strong economic growth neutralize retain of the Forties pipeline & the resumption of production following a pipeline interruption in Libya. After an unplanned shutdown, on December 30th, the 450,000 barrels per day capacity of pipeline system of Forties in the North Sea returned to full operations.
Since many decades, oil markets have been supported by production cuts annually, by the Russia and the Middle East dominated firm of the Petroleum Exporting Countries (OPEC). The cuts begun in the month of January last year and are expected to cover all of 2018.
American commercial crude oil inventories have decreased by 20% from their ideal highs march 2017, to 431.9 million barrels. There is strong demand growth from China who has also been supporting crude oil.
Only increasing production of the USA, is on the way of breaking through 10 million barrel per day (bpd), which is somewhat affecting the outlook into 2018.