Breaking News
0

Oil markets near three-year highs, supported by healthy demand

CommoditiesJan 15, 2018 21:20
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Oil markets near three-year highs, supported by healthy demand

By Henning Gloystein

SINGAPORE, Jan 16 (Reuters) - Brent crude prices were on Tuesday settling in around $70 per barrel, levels last seen before the start of an oil market slump in late 2014.

Prices have been driven up by production curbs in OPEC nations and Russia, as well as by robust demand on the back of healthy global economic growth.

Brent crude futures LCOc1 , the international benchmark for oil prices, had dipped 22 cents to $70.04 per barrel by 0213 GMT on Tuesday from the previous day's close. But traders said Brent was well supported overall around this level.

Brent hit $70.37 a barrel on Monday, its strongest since December, 2014, which was at the beginning of a three year oil price slump.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $64.53 a barrel, up 23 cents, or 0.36 percent from their last settlement. WTI hit a December-2014 peak of $64.89 a barrel in early trading.

"We have updated our supply/demand balances to reflect a faster-than-expected tightening in the global oil market due to improving cyclical conditions, cold winter weather, and higher than expected OPEC compliance," Bank of America Merrill Lynch (NYSE:BAC) said.

In an effort to tighten markets and prop up prices, the Organization of the Petroleum Exporting Countries (OPEC) and Russia started to withhold production in January last year, and the cuts are set to last through 2018.

This restraint has coincided with healthy oil demand and economic growth, pushing up crude prices by more than 13 percent since early December.

"We now see a deficit of 430,000 barrels per day (bpd) in 2018 compared to 100,000 bpd prior, and thus see Brent crude oil prices averaging $64 per barrel in 2018 compared to $56 prior. Our WTI projection also moves up from $52 per barrel to $60 per barrel for the same reasons," Bank of America Merrill Lynch said.

Crude futures have also been supported by a weak dollar, which fell to its lowest level in three years late on Monday against a basket of other leading currencies .DXY .

A weakening dollar often triggers investment into liquid commodity futures like gold and crude oil. major factor that in late 2017 held back crude prices, the surge in U.S. production, has stalled at least temporarily as icy winter weather in North America has shut down some facilities.

Instead of hitting 10 million bpd this month, as widely expected, U.S. production C-OUT-T-EIA fell from 9.8 million bpd in December to 9.5 million bpd currently.

Despite this, most analysts still expect U.S. production to break through 10 million bpd soon. C-OUT-T-EIA

Oil markets near three-year highs, supported by healthy demand
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email