Oil investors finish 2017 on positive note
By Sara Israfilbayova
World oil prices are growing on the last trading day of the year on the data of the U.S. Energy Department about the weekly decline in the volume of stocks of raw materials.
U.S. West Texas Intermediate (WTI) crude futures were at $60.21 a barrel, up 0.6 percent from their last close, after hitting a June 2015 high of $60.32 earlier in the day, Brent crude futures - the international benchmark - were also up, rising 0.7 percent to $66.61 a barrel. Brent broke through $67 earlier this week for the first time since May 2015, according to Reuters.
The Energy Information Administration (EIA) reported that the U.S. oil production last week fell to 9.754 million barrels per day from 9,789 a week earlier. Nevertheless, despite the decline, the level of production exceeds the volume of the last year by almost 16 percent, and many analysts predict that by the end of 2018, oil production in the U.S. will break through the mark of 10 million barrels per day.
It also was reported that oil reserves in the U.S. decreased last week by 4.61 million barrels to 431.88 million barrels, while analysts forecast a decrease of 4.0 million barrels.
“The tug-of-war between OPEC and the U.S. will continue to pressure oil from trading above $60 a barrel in 2018,” said Kim Kwangrae, a Seoul-based commodities analyst at Samsung Futures Inc. “Like we’ve seen this year, geopolitical risks will be the key factor going forward for oil to breach $60.”
In November 2016, the OPEC summit was held in Vienna, where OPEC members reached an agreement on reducing oil output by 1.2 million barrels per day. In December 2016 was a meeting of oil producers outside the OPEC. Following the meeting, was signed an agreement to reduce oil production by a total of 558,000 barrels per day starting from January 2017.
OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.
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