Brent crude prices rose to $70 a barrel on Monday, backed by continued output cuts led by OPEC countries and Russia, ignoring the increase in US and Canadian drilling activities that predict future production growth in North America.
Brent crude futures rose by 13 cents, to $70 a barrel, while US WTI crude rose 23 cents, reaching the price of $64.53 a barrel. Both crude rose to their highest levels since December 2014 over last week, with Brent hitting $70.05 a barrel and West Texas Intermediate at $64.77.
Oil markets are supported by production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia, which aim to raise crude prices. So far, OPEC is still adhering to optimism, despite the pressure on the rapid rise of crude oil prices. Cooperation between producers in and outside OPEC is growing stronger and takes the formal institutional form, as a long-term strategy rather than as temporary cooperation depends on recovering prices and restoring market equilibrium, the report said. The report noted that there is a dynamic and growing desire of producers to join the declaration of joint cooperation, and there are no indications that non-OPEC countries wish to end their commitments to the production reduction agreement.
The report stressed, quoting the president of OPEC, that 2018 will undoubtedly be a year of restoring the balance in the markets, and that the commitment between oil producers will remain strong and may increase strength over the current year, and it must be borne in mind that the demand may exceed 100 million barrels per day this General.
In the same vein, Mohammad Barkindo, Secretary General of OPEC, on the sidelines of the 9th Energy Forum in Abu Dhabi, said that global demand for oil will rise to about 1.5 million bpd this year. “Global energy demand growth is expected to grow by about 96 million barrels of oil equivalent per day between 2016 and 2040, and about 23% of this increase will come from China,” he said, noting that a similar trend could happen in the case of oil.
World oil demand is expected to grow by 16 million bpd, from 94.4 million bpd in 2016 to 111.1 million bpd in 2040, noting that China will also be contributing with a staggering 38%.
On a similar note, the price of a barrel of crude oil reached $70 after achieving five consecutive weeks of gains, recording the highest level of prices in three years.
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