OPEC production reduction makes market supply and demand tighten international oil prices close to two and a half high

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FX168 financial newspaper news (Hongkong) international crude oil prices on Tuesday (December 26th) at the beginning of the session was steady, with Brent crude oil wandering in 2015 highs, thanks to the organization of Petroleum Exporting Countries (OPEC) and robust Russian LED production cuts under the demand outlook.

On Tuesday,

index Brent crude oil futures were flat at 64.74 US dollars per barrel, close to the June 2015 high of 65.83 US dollars in December 12th. Meanwhile, the US WTI crude oil futures were also flat at 58.51 US dollars per barrel, moving towards fifth consecutive trading days.

, due to the extended production of non OPEC oil producing countries such as the organization of Petroleum Exporting Countries (OPEC) and Russia, to the end of 2018, to tighten supplies and support oil prices, Brent crude oil has increased by 47% since mid 2017.

Iraq Petroleum Minister Jabar Ali al-Luaibi said on Monday (December 25th) that he is optimistic that the oil market will have a balance of supply and demand in the first quarter of 2018, resulting in a rise in oil prices. "The oil market supply and demand will be more balanced during the first quarter of next year, which will be positive in the rise of international oil prices," he said.

, Russia's energy minister Novak (Alexander Novak) pointed out last Friday that OPEC and Russia will very quietly end the oil production reduction, and may extend production reduction measures in some way to avoid new oversupply in the market.

but in the long run, OPEC and Russia's production reduction efforts are likely to be under pressure from US oil production. US oil production has increased by more than 16% since mid 2016, and is rapidly approaching 10 million barrels per day.

on Friday Beck Hughes oil service weekly report shows that as of December 22nd week, the U.S. active rig count remained at 747 seats, 523 seats are still far higher than the same period last year, most analysts expect the U.S. production will break 10 million barrels a day in a few weeks hit.

on the other hand, the Forti J oil pipeline in Beihai will resume operation and inhibit the rise of oil prices. The Ineos Group of the oil pipeline operator has issued a statement recently that the Beihai Fortis pipeline for transporting Brent crude oil is ready to resume normal flow by the beginning of next year. The interruption of the pipeline has pushed up oil prices, and this is the first time that Beihai has suffered a force majeure since 1988.

Hyundai Futures Corp commodity analyst Will Yun said, "now it is too early to assert that the number of us oil drilling will continue to decline, but we should not ignore this fact. Because now it is winter, some seasonal factors may interfere with drilling activities."

At the same time,

added, "before the closure of the Fortis oil transmission system has pushed up oil prices, this factor will continue to support the rise of oil prices until at the end of this year".

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From: OPEC减产令市场供需趋紧 国际油价接近两年半高位
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