Oman crude oil price close to two-year high

Meanwhile, Opec, Russia and several other producers have cut production by about 1.8 million barrels per day (bpd) since the start of 2017, helping oil prices rise by about 15% in the past three months.

Following glut in the worldwide crude oil market, OPEC had required its members to cut down on their oil production quota in order to stabilise prices in the global oil market. Tight physical markets, especially on the product side, are further supporting the front-end of the forward curve with high margins driving refinery crude buying. The front-month contract in Brent retraced a little after that, but remained up $0.34, or 0.6%, at $56.77 by 10:34 a.m. ET.

WTI Crude Oil (Nymex) for November rose 3.08 percent to settle at $52.22 a barrel. Strains should last through the third quarter, the company said.

Global oil supply was 97 million bpd during the second quarter of this year while demand was 97.9 million bpd, the International Energy Agency said in its latest oil market report. There was speculation that extension of the deal may be announced but Opec left it for its January 2018 meeting. We have every reason to be pleased with the steady progress we have made in our collective efforts to overcome the challenges of the current oil market cycle – which is worse than all previous cycles.

OPEC and other major oil producers such as Russian Federation and Azerbaijan reached an agreement in December 2016 to remove 1.8 million barrels a day from the market. The cartel ramped up output to meet strong demand, not ahead of it, and cut production during recessions. Let’s go over why oil prices have returned to bull market territory.

“Although there was plenty of price-bullish news making headlines yesterday, undoubtedly the biggest factor was the referendum in the Kurdistan region of Iraq”, analysts at Vienna-based JBC Energy said in a note.

“We’re seeing more and more evidence that it’s not the global oil companies, it’s not the independent oil companies that are lagging new investments, but it’s OPEC countries lagging, particularly those five”, he said. The EIA revised lower US oil production for 2017 from 9.35 million barrels per day to 9.25 million barrels per day a 100k barrel a day decrease. But the situation has improved for producers following a recovery in China and stronger growth across most developed nations in growth.

The company launched the LOOP Sour price quote in March this year to mark prices for medium-sour grades of crude produced offshore in the United States and imports for the USA gulf coast.

Once the market recognises the United States forecasting error, Mr Hamm said, crude prices could rise to US$60 a barrel from around US$50 now. The benchmark for more than half the world’s oil rose to the highest close in more than two years on Monday.

However, the number of USA oil rigs operating, an indicator of future production, fell for the third straight week as a 14-month drilling recovery stalled as companies pared back on spending plans when crude prices were softer.