Published: Sat, January 13, 2018
Business | By Tara Barton

Oil Price Hits Three-Year High

Oil Price Hits Three-Year High

Energy prices have spiked in recent weeks amid speculation that OPEC will curb production in 2018 and re-balance the global oil markets.

Meanwhile, West Texas Intermediate gained 0.81 per cent, to Dollars 63.47 per barrel, while Brent crude rose 0.41 per cent at USD 69.10.

Last November, OPEC together with Russian Federation and other countries extended the deal to reduce oil production, expecting the agreement to cover the entire 2018.

West Texas Intermediate (WTI) crude, the benchmark price for US and Canadian crude oil, traded at a high of $65.53 on the NYMEX.

The Yomiuri ShimbunTakayuki Nogami, a chief economist of the Japan Oil, Gas and Metals National Corporation, spoke about the current crude oil market with The Yomiuri Shimbun.

Responding to the severe crash and deflation in the price of oil in the late 1990s, merger activity helped improve economies and scale of production for these companies and today they control almost 5% of the world's oil and natural gas reserves.

According to online source Finanz, the US crude oil inventories shrank over the past week, which pushed oil prices higher.

The RAC signalled pump costs were likely to reflect the march of Brent crude - damaging the economy at a time drivers and businesses could ill afford it.

Oil Price Hits Three-Year High
Oil Price Hits Three-Year High

Crude oil production from the United States is expected to increase more than in any other country.

Oil topped $70 a barrel in London for the first time in three years as production cuts by Opec and rising demand whittle away a global surplus.

As a result, Asian refiners processed an unprecedented 23 million barrels per day (bpd) of crude oil in late 2017.

Price of crude oil has climbed to its highest level in the last two years, with Brent crude hitting above $69 per barrel.

The average volume of USA product supplied for crude oil and petroleum products was 19.8 million b/d through October, the highest level since 2007.

Crude oil production from the Organization of the Petroleum Exporting Countries (OPEC) averaged 32.5 million b/d in 2017, a decrease of 0.2 million b/d from 2016. More than 820,000 US crude contracts changed hands on Thursday, far surpassing the daily average of 619,000 contracts over the past 200 days of trading.

From the middle of 2014 motorists in the United Kingdom began to benefit from falling pump prices, culminating in December 2015 when a few low-priced retailers sold both petrol and diesel for under £1 a litre. Oil prices opened sharply lower today, dropping more than Rs 50 in early minutes of the trade.

For more information on crude oil, visit the S&P Global Platts website.

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