U.S. crude oil prices hit more than 3-year high

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Opec's members are not keen on Brent prices above $60 a barrel because of the potential for more shale output, Iran's Oil Minister Bijan Namdar Zanganeh said, according to the ministry's news service Shana.

A barrel of West Texas Intermediate was changing hands for $63.35 U.S. in NY, after having earlier been even higher.

The and allies including Russian Federation are keeping supply limits in place in 2018, a second year of restraint, to reduce a price-denting glut of oil held in inventories.

The S&P energy sector closed up 2 per cent as Brent crude went above $70 a barrel for the first time since December 2014, boosted by a surprise drop in USA production and lower crude inventories.

Oil futures failed to hold the gains, selling off as the close of trading approached, with analysts warning that the market might have little room left to run.

Analysts expect refinery utilization fell 0.5 percentage point last week to 96.2% of capacity.

With the cold front lifting this week, the focus will quickly shift back to whether USA production can head even higher - as many forecasters expect - particularly given this recent boost in oil prices.

One reason, traders say, is that the supply of oil products remains ample.

Oil prices have risen above United States dollars 70 per barrel for the first time since 2014 as investors bet supply cuts led by OPEC will dominate the market this year.

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Based on data through October 2017, average US imports of crude oil increased by more than 103,000 b/d from the 2016 level to almost 8.0 million b/d in 2017, the highest level since 2012.

On January 10, oil prices were supported by API data.

On Friday, prices were also lower on data from China showing a fall in monthly crude imports.

Adding to bullish sentiment on Thursday, market intelligence firm Genscape estimated a draw of more than 3.5 million barrels at the Cushing, Oklahoma delivery point for USA crude futures for the week ended Tuesday, according to traders who saw the data.

As shale oil development trends are rather uncertain, it is possible that the upward trend in crude oil prices will continue.

Analysts and traders have warned about the risk of a price correction since the start of 2018, but they say overall market conditions remain strong, mainly due to output cuts led by the Organization of the Petroleum Exporting Countries and Russian Federation.

Brent crude futures settled 6 cents higher at $69.26 a barrel, after hitting $70.05 a barrel during the session, its highest level since November 2014. Since the beginning of 2017, the Organization of Petroleum Exporting Countries and its allies have sought to reduce oil production by nearly 1.8 million barrels a day, curbing exports and business for tankers on key trade routes.

For more information on crude oil, visit the S&P Global Platts website.

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