Tuesday, 22 May 2018
Latest news
Main » Why crude oil prices are on upward swing, by USA energy agency

Why crude oil prices are on upward swing, by USA energy agency

18 January 2018

Oil prices kept stable on Wednesday.

Expected growth in total USA crude supply was revised higher by 110,000 barrels a day to 820,000 a day, led by conventional production.

More news: Kelly: Trump campaign promises on border wall have 'evolved'

While enjoying the extra revenues, the Organization of the Petroleum Exporting Countries, Russia and their allies remain wary of sending prices so high that USA shale production climbs even faster and the market becomes oversupplied again. West Texas Intermediate crude reached $64.89 on Tuesday, both hitting more than three-year highs. Brent Crude Oil price at London's IСE Stock Exchange up by 0.84% to $69.59 per barrel.

"In short, inventories are coming down faster than we expected and OPEC is succeeding at rebalancing the oil market", wrote Francisco Blanch, head of global commodities and derivatives research at Bank of America Merrill Lynch. The American Petroleum Institute (API) reported a large draw of 5.121 million barrels of United States crude oil inventories for the week ending January 12, marking seven large draws in seven weeks, according to the API data, noted media reports. While soaring prices have prompted warnings - from Iran's oil minister to Goldman Sachs Group Inc. - of a fresh surge in USA production, ministers from the United Arab Emirates, Iraq and Kuwait insist there's no need to change tack and the cartel will stick with its plan to restrain output for the rest of the year. In November, oil ministers from OPEC and non-OPEC member nations agreed to extend output cuts for the duration of 2018. The U.S. government's weekly supply data is due on Thursday.

More news: 3 law enforcement officers shot overnight in York County, officials say

Despite this, analysts warned that the recent oil price rally, which has lifted crude by around 14 percent since early December, may be about to run out of steam. Those traders could start selling those positions if worldwide oil demand disappoints, OPEC members start cheating or US output rises too sharply.

Attacks on pipelines and other facilities in 2016 cut Nigeria's crude production from 2.2 million barrels per day (bpd) to near 1 million bpd, the lowest level in at least 30 years.

More news: Google to open five more datacentre regions across the globe in 2018

Why crude oil prices are on upward swing, by USA energy agency