Oil prices near 2015 shows highest improvement on tight market
On Thursday, oil prices were stable with trading activity had been dying up ahead of the New Year weekend. Heading towards the fresh New Year 2018, some traders said that due to ongoing supply cuts conducted by the Middle East-dominated Organization of the Petroleum Exporting countries (OPEC) and top producer Russia, the market conditions were relatively tight.
The United States of America’s West Texas Intermediate (WTI) crude futures were at the price rate of $59.69 a tierce at 0336 GMT increased 5 per cents from their last settlement. It is also reported that earlier this week, WTI broke through $60 a barrel which is considered to the first time since the June 2015.
As per a report, WTI received support from the American Petroleum Institute (API) that shows around 6 million barrel drop in the inventories of crude oil to 432.8 million. Brent crude futures price were recorded at $66.50, a barrel, rose up to six cents. Earlier this week, Brent broke through $67, the first time since May 2015.
Oil rates near 2015 highs on unyielding market
Traders have said that the high prices were a result of a tight market following a year of OPEC and Russia-led production cuts which were begun January 2016 and scheduled to cover all of the coming year 2018. Pipeline outages in the North Sea and Libya have also been supporting oil prices.
The head of trading for Asia/Pacific at futures brokerage Oanda, Singapore, Stephen Innes said that, “Given the stronger price response to supply distribution in the wake of OPEC supply cuts, the market is expected to make further gains.”
He even added,” With geopolitical risk there is no issue ahead of Libyan elections next year, we should definitely expect more regional chaos as well as disorder to underpin oil prices.”
Nearly, 100,000 barrels per day in oil supplies were damaged in Libya after an attack on a pipeline this week. While in the North Sea, the 450,000 barrels per day capacity Forties pipeline system was closed earlier this month because of a crack.
In January, both pipelines are expected to return to normal operations, with Forties in the startup process. Both pipelines are expected to return to normal operations in January, with Forties already in the start-up process.