Help Desk -
9717405332, 9599714297, 9810335381
Email
Password

Oil resurrection sets stage for another OPEC-Shale clash in 2018

Gasoil News - Published on Wed, 03 Jan 2018

Image Source: newsmax.com
Bloomberg reported that oil continued its revival from the biggest crash in a generation, with prices set for a second annual gain after a year marked by hurricanes, Middle East conflict and the tussle between OPEC and US shale. Futures are up more than 11 percent in 2017, having entered a bull market in September. The year’s gains were driven by output cuts by the Organization of Petroleum Exporting Countries and Russia, along with geopolitical tensions in the Middle East and pipeline disruptions from the North Sea to Canada and Libya. In 2018, investors will watch whether the price recovery triggers a new flood of US output.

Analysts led by Michael dei-Michei at consultants JBC Energy GmbH in Vienna, said that “The current highs are unsustainable in the short-to-medium term, with prices likely to head back below $60 once we get past January, but for now the season of goodwill appears to be in full swing.”

Speculation is rising that American drillers will put more rigs to work as oil strengthens, with shale growth driving forecasts of record US supply in 2018. That could undermine plans by producers including Saudi Arabia, who have pledged to extend production curbs through the end of 2018 to wipe out a global glut. After Hurricane Harvey shut Gulf Coast refiners at the end of August and hurt prices, violence in Iraq and a pipe crack in the UK have helped buoy crude.

West Texas Intermediate for February delivery was at USD 60.04 a barrel on the New York Mercantile Exchange, up 20 cents, at 1:28 p.m. in London. Total volume traded was about 24 percent below the 100-day average. Front-month prices are 12 percent higher this year, after rising 45 percent - the most since 2009 - in 2016.

Brent for March settlement rose 20 cents to USD 66.36 a barrel on the London-based ICE Futures Europe exchange. The February contract expired, after rising 28 cents to USD 66.72. The benchmark for more than half the world’s oil has gained 17 percent this year, after climbing 52 percent in 2016. It was at a premium of USD 6.27 to March WTI.

According to the Energy Information Administration, oil is trading at the highest level since mid-2015 after WTI broke above USD 60 a barrel for the first time in more than two years. The benchmark traded at an average price of about USD 51 this year. US crude stockpiles fell 4.6 million barrels last week to the lowest level since October 2015. That beat the 3.75 million average estimate in a Bloomberg survey of analysts.

Kim Kwangrae, a Seoul-based commodities analyst at Samsung Futures Inc, said that “The tug-of-war between OPEC and the US will continue to pressure oil from trading above $60 a barrel in 2018. Like we’ve seen this year, geopolitical risks will be the key factor going forward for oil to breach USD 60.”

Following an explosion, Waha Oil Co. is working to repair the pipeline that carries crude to Libya’s Es Sider port, the North African nation’s biggest export terminal, while a major UK North Sea pipeline is nearing a return to full service after an outage this month.

Source :

Posted By : Rabi Wangkhem on Wed, 03 Jan 2018
Related News from Gasoil segment