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Crude Oil Fails To Hold $64 But Ends Higher

13 Janvier 2018

Rising geopolitical fears coupled with the ongoing OPEC output cap, means the price of Brent crude oil is moving closer to the $70 per barrel level.

Futures added as much as 1.3% in NY to the highest intraday level in nearly three years.

In its report, the EIA predicted oil prices in the USA will average $54.01 a barrel in the first quarter of 2018, an increase from earlier predictions of $51.79.

This week's USA inventory report showed crude stockpiles falling for an eighth week and hitting the lowest levels since August 2015.

Reuters said that investors are gaining confidence up to a point and that 2018 will be the year of oil stocks. Jet fuel product supplied is up 13.47 percent compared to the same four-week period past year. Markets remained buoyed by the comments throughout the session, shrugging off data that suggested the US production may continue to surge.

Market participants were awaiting a USA decision on whether to extend temporary waivers on sanctions against Iran due on Friday.

Output stayed below that mark the next two weeks, perhaps on account of weather-related problems which could have played a role last week as well.

The strength of the oil market would have caught many analysts by surprise as the consensus forecast for oil is probably somewhere in the US$50s per barrel for 2018.

Brent was trading below $30 in early 2016 as a result of a massive supply glut and weaknesses in the world economy.

Oil prices edged lower on Friday after hitting a three-year high the previous day, but the benchmarks remained on track for a fourth straight week of gains.

US crude futures recently traded down 21 cents, or 0.33%, at $63.59 a barrel on the New York Mercantile Exchange.

This reduction in the size of excess stocks emerged as a catalyst for higher oil prices.

Relatively weak Chinese December oil data weighed on prices, traders and analysts said. Since the past two years, the USA has been increasing production and exports. "This would, of course, be far better news for United Kingdom motorists". The line came back on stream over the New Year holiday weekend, but 2018 started with political unrest in Iran, one of the leading producers in the Organization of Petroleum Exporting Countries.

Several analysts this week have warned the rally may run out of steam, Trump notwithstanding.

In Asia, the world's biggest oil consumer region, refiners are suffering from high prices and ample fuel supplies. In December, China's crude imports fell 9% month on month to 33.7-million tonnes, or 7.97-million bpd, customs data showed.

Gasoline futures recently fell 0.28% to $1.8318 a gallon.

Crude Oil Fails To Hold $64 But Ends Higher