TEHRAN: Brent for January settlement gained 15 cents to $63.64 a barrel on the London-based ICE Futures Europe exchange, after falling in the past two sessions. “The latest catalyst for this move higher was the sharp rise in geopolitical tensions last weekend, with growing confidence in an OPEC extension and strong oil demand fueling the rally previously”, said USA bank Goldman Sachs.
Crude oil prices drift lower early Wednesday after Saudi Arabia’s monetary authority seeks to allay investor concerns.
Oil markets were stable on Friday, supported by ongoing supply cuts led by OPEC and Russian Federation as well as by strong demand, although the prospect of rising USA shale output capped prices around recent gains.
China’s October oil imports fell to just 7.3 million bpd from a near record-high of about 9 million bpd in September, according to data from the General Administration of Customs.
Prices got a boost this week from a crackdown on corruption by the Saudi crown prince.
Despite this, many analysts say the strong price rally of the past months has likely run its course, at least for now.
Oil prices may be approaching the point at which shale oil producers in the United States kick into overdrive, undermining an approach by the Organization of Petroleum Exporting Countries to correct an oversupplied market with coordinated production cuts. “The first response comes from the most agile producers, but once it looks like oil prices could be sustained at higher levels, then even less agile producers can come back online”.
OPEC will discuss output policy during a meeting on November 30, and it is expected the group will extend the cuts beyond the current expiry date in March 2018.
“With the OPEC/non-OPEC deal extension beyond March 2018 a certainty, prices may become stronger and temporarily reach the $65-$70 per barrel range in 2018”, said energy consultancy FGE.
US crude production jumped to 9.62 million barrels a day last week, according to data from the Energy Information Administration.
Crude oil futures fell Friday, trimming strong recent gains as data showed the United States oil rig count jumped last week.
“It doesn’t matter how bullish the fundamentals are … when an asset goes vertical there is always room for a pullback and consolidation of recent price moves”.
