Published: Thu, January 18, 2018
Culture | By Stewart Greene

Brent crude oil dips but remains near 70 dollars a barrel

Brent crude oil dips but remains near 70 dollars a barrel

Brent crude futures were at $69.56 at 0255 GMT, up 18 cents, or 0.3 percent, from their last close.

Prices have been driven up by oil production curbs in OPEC nations and Russian Federation, as well as strong demand thanks to healthy economic growth.

Both contracts climbed to their highest levels since December 2014 this week with Brent reaching $70.37 on Monday and WTI up to $64.89 on Tuesday.

Gasoline stocks rose by 1.8 million barrels while distillate fuels stockpiles, which include diesel and heating oil, climbed by 609,000 barrels, the API data showed. February crude was at $64.07 a barrel in electronic trading, up from the settlement of $63.97 on the New York Mercantile Exchange.

OPEC and Non-OPEC members agreed during a meeting in Vienna in Dec 10, 2016 to limit oil output in reaction to a drop in oil prices at the time.

Oil prices were pulling back to even Wednesday after recent declines amid renewed threats for OPEC member Nigeria, but production trends are balancing the run.

Brent crude oil dips but remains near 70 dollars a barrel
Brent crude oil dips but remains near 70 dollars a barrel

Analysts said OPEC shouldn't declare its mission accomplished too early and abandon its production cuts, as higher crude prices may stimulate increased shale oil production. USA will rise to about 11 million bpd by the end of next year.

On Tuesday, the EIA said it expected US oil output to increase in February, with production from shale rising by 111,000 barrels per day (bpd) to 6.55 million bpd.

The Minister said the upcoming committee meeting of some OPEC and non-OPEC ministers in Oman would focus on reviewing adherence to the cuts, adding that compliance in December was at 125 percent, while in November it was 122 percent, the highest since the deal started in January 2017.

Rashidi explained that the market is now stable enough to accommodate any issues that do not have a major impact on supply and demand, adding: "control of production will insure stability of the market more than any factor such as relations between countries".

Markets may come under pressure from rising US production, analysts say.

Despite this, traders said prices were unlikely to fall far due to risks to supply disruptions.

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