Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Crude Oil Prices Hit 3-Year Highs, Shrug Off Signs of Rising US Output

Published 2018-01-12, 02:30 p/m
Updated 2018-01-12, 02:43 p/m
© Reuters.

© Reuters.

Investing.com – Crude oil prices settled at three-year highs on Friday as signs of growing US production was offset by ongoing optimism that OPEC-led output cuts would continue to drain the market of excess supplies.

On the New York Mercantile Exchange WTI crude futures for January delivery rose 54 cents to settle at $64.30 a barrel, while on London's Intercontinental Exchange, Brent gained 56 cents to trade at $83 a barrel.

The number of oil rigs operating in the U.S. rose by 10 to 752, its highest level in more than four months, according to data from energy services firm Baker Hughes.

The sharp uptick in US rigs drilling for oil did little to halt the rally in oil prices as investors remained optimistic that the bullish global economic growth would continue to fuel oil demand growth while major oil producers’ compliance with the deal to cut output would remain strong.

This comes as data earlier this week showed US crude oil production dropped by the most since October as the “bomb cyclone” winter storm has disrupted output.

That said, however, the steep run-up in oil prices above three-year highs has led some to question whether the current rally is on borrowed time.

“It is premature to expect further upside to be sustainable, at least until the market gains a better grasp of the pace of U.S. production growth,” said Michael Tran, a commodities strategist with RBC Capital Markets.

The four-week rally in crude prices comes as investors mulled over president Donald Trump’s decision to extend sanctions relief temporarily for Iran, keeping the Obama nuclear deal alive, dampening the prospect of a reduction in global supplies.

Ahead of Trump’s decision on the Iranian nuclear deal, some market participants were of the view that an end to sanctions relief for Iran would slashed the country’s oil exports significantly, ridding the market of excess supplies, extending the oil rally.

Latest comments

Oil is coming down
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.