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Crude prices updated highs since December 2014

25 January 2018 16:07 (UTC+04:00)
Crude prices updated highs since December 2014

By Sara Israfilbayova

World oil prices have renewed their highs since December 2014 amid the publication of data from the U.S. Energy Department on reducing raw material reserves in the country, the OPEC + agreement and the weakening of the dollar.

Brent crude, the international oil benchmark, hit $71.20 a barrel - the highest since early December 2014. At 0956 GMT, Brent eased to $70.81, still up 28 cents.

U.S. crude climbed to $66.44, also the highest since early December 2014, before dipping to $66.11, up 50 cents, according to Reuters.

The U.S. Energy Department reported that commercial oil reserves in the country (excluding the strategic reserve) declined by 1.1 million barrels to 411.6 million during the week ended on January 19. In this case, the decline occurs for the tenth week in a row. The reserves at the country’s largest terminal in Cushing fell by 3.2 million barrels, to 9.2 million barrels.

The market was also influenced by the meeting of Russian Energy Minister Alexander Novak and Saudi Energy Minister Khalid Al-Falih within the framework of the World Economic Forum in Davos. The ministers discussed joint projects.

Meanwhile, President of the leading Russian oil company LUKOIL Vagit Alekperov said at the World Economic Forum in Davos that in April this year, the global oil market could gain momentum and then it would be necessary to gradually withdraw from the OPEC+ deal on oil production restrictions.

He said that to create balance in the market 146 mln barrels of excess oil reserves should be taken into account.

“Probably, the oil market will probably balance in April. Then the ministers will gradually discuss the situation out of the situation. I am confident that OPEC+ ministers will discuss the issue and balance the market at a reasonable price to shape the country's budget,” Alekperov added.

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. The meeting ended with signing 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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