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Oil prices near 2015 highs on tight market

by December 28, 2017 General

By Gloystein

(Reuters) – prices were stable on Thursday with trading activity drying up ahead of the New Year weekend.

Heading into 2018, traders said market conditions were relatively tight due to ongoing supply cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC), as well as top

U.S. Intermediate (WTI) crude futures were at $59.69 a barrel at 0336 GMT, up 5 cents from their last settlement. WTI broke through $60 a barrel earlier this week, the first time since June 2015.

WTI received support from a report by the (API) showing a 6 million barrel drop in crude inventories to 432.8 million.

Brent crude futures were at $66.50 a barrel, up 6 cents. Brent broke through $67 earlier this week, the first time since May 2015 this week.

Traders said the high prices were a result of a relatively tight market following a year of OPEC and Russia-led production cuts, which were started last January and scheduled to cover all of 2018.

Pipeline outages in and the have also been supporting prices.

“Given the much stronger price response to supply disruptions in the wake of OPEC supply cuts, the market is poised to make further gains,” said Stephen Innes, of trading for Asia/Pacific at in

“With geopolitical risk no less sure ahead of Libyan elections next year, we should expect more regional chaos and disorder to underpin prices,” he added.

Around 100,000 barrels per day (bpd) in supplies were disrupted in this week after an attack on a pipeline.

In the North Sea, the 450,000 bpd capacity was shut earlier this month due to a crack.

Both pipelines are expected to return to normal operations in January, with Forties already in the start-up process.

A major factor countering efforts by OPEC and efforts to prop up prices is U.S. production, which has soared more than 16 percent since mid-2016 and is fast approaching 10 million bpd.

Only OPEC king-pin and produce more.

The latest are due to be published by the on Thursday.

(Reporting by Gloystein; Editing by and Kenneth Maxwell)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)