Oil prices rose to a two-and-a-half year high on Wednesday. The rise was supported by tensions caused by continuing unrest in OPEC member Iran, despite the fact that both the United States and Russia increased their production levels.
US crude futures rose 55 cents, reaching the price of $60.91 a barrel, their highest recorded since June 2015. London Brent crude was up 50 cents at $67.07 a barrel, approaching a record since $67.29 yesterday, the highest since In May 2015. Analysts warned that this context causes prices to face a downward correction, and expected that the price support will weaken the unrest in Iran unless the situation begins to affect the production of oil, which has not happened so far, or the United States would impose sanctions on Tehran. Brent crude is expected to reach $60 in 2018.
Oil sector participants say prices have risen a lot recently, at a time when US production is expected to increase again and doubts are emerging as to whether demand growth will continue at current levels. US oil production has risen 16% since mid-2016, reaching 9.75 million bpd by the end of last year.
The sentiment has also been negatively affected by concerns that Russia may not be fully committed to an agreement with the Organization of the Petroleum Exporting Countries (OPEC) to cut production by 300,000 bpd from the highest monthly level in 30 years, 11.247 million bpd, recorded in October 2016. The latest data for 2017 shows that Russia’s oil production increased to an average of 10.98 million bpd, compared with 10.96 million bpd in 2016 and 10.72 million bpd in 2015.
Be the first to comment