A Brief Look at the Oil Market

20. December, 2017 News No comments

What the 2017 has brought us?

The 2017 started the year with the crude oil Brent price at 55.5$ per barrel. If any dramatic happening disrupting world oil supply takes place till the end of the year, the 2017 will end up with the Brent oil price over 62$ per barrel. In that case, the average price for the 2017 will be about 54$ which means the increase by 20% as compared to the 2016. It is worth to notice the massive bounce back of crude oil prices in the second half of the year. In the first quarter of the 2017 the barrel of oil costed average about 54.5$, while in the last quarter it may be even 62$. In the middle of the year a couple of factors affected an oil trading. Tropical cyclones in the USA, blocks of crude oil pipelines by Nigerian community due to oil spill, OPEC deal to curb oil output and recent closure of the Forties Pipeline in the North Sea have certainly contributed to the current prices.

What the 2018 can bring us?

In December, OPEC members decided to extend oil-production cuts through end of the 2018. However, in the opinion of  International Energy Agency (IEA), oil extraction in countries out of OPEC will increase in the 2018 by 1.6 million barrels per day. The most significant production increase is expected in the USA, where in September the largest production of oil since April 2015 was recorded.  In the first week of December the output  increased to 9.78 million barrels per day which is the highest level since the 1983. The grow of drilling activity in the USA suggests further output increase in the upcoming months. According to estimates of the American Department of Energy (DoE), the daily production of the crude oil in the USA in the next year may exceed 10.02 million barrels. On the other hand, IEA expects that the world demand for crude oil will drop to 1.3 from present 1.5 million barrels per day.

The oil market shows signs of recovery. The whole 2017, and especially the significant bounce back of the oil price in the 4th quarter let us to be optimistic about the future. Even with rising production, the global oil market should stay balanced.



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