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WTI Crude Oil Price Hits 60 bbl, Highest Since Mid

14 Janvier 2018

With pipeline outages resolved and protests in Iran showing no signs of affecting its oil production yet, Hansen said prices could fall in early 2018, especially with rising us output. Independent E&P firms should be "particularly attractive" to larger independents and the integrated producers.

Portfolio managers held a record 1,328 million barrels of long positions in Brent, WTI, U.S. gasoline and U.S. heating oil on December 26, according to data published by regulators and exchanges. But rising US production, which is expected to pass more than 10 million bpd, this year, is not helping the crude oil outlook going into 2018.

U.S. oil production, which has risen more than 16 percent since mid-2016, is expected to surpass 10 million bpd next year, some analysts said.

Another topsy turvy day in the crude price market saw West Texas Intermediate reverse earlier losses this week and surge on Wednesday by over 2 percent, and this in turn has caused some experts to also reverse the growing sentiment that prices will remain range bound at best and drop to $40 at worst in 2018.

Our 2018 crude oil projection of US$55 to US$60 per barrel is maintained, given that the recent optimism stems from post-continuation of Opec's production quota and geopolitical concerns in the Middle East amid concerns over a United States shale oil resurgence. The front-month futures' premium over second-month WTI is at the widest in more than three years.

Already murmurs of dissent are coming from Russian Federation, which is itching to exit the deal as soon as possible.

Hedgeye Risk Management, whose analysts monitor OPEC maneuvers, said it believes the nuclear deal and USA waivers on sanctions are both in serious jeopardy.

"It prevents a sharp and sudden increase in prices and helps Opec officially terminate the agreement by the end of the year", he told The National. Both countries were exempt from cuts a year ago but are now expected to join the effort with a combined limit of 2.8 million barrels a day. The exporters group has made fairly sharp turnarounds.

US government forecast published last week warned that shale production will be rising to record levels in January. Product supplied for crude and oil products rose to 19.8 million barrels a day, on average, in 2017. Does that imply a careful consideration of further cuts, possibly extending into 2019?

"Geopolitical uncertainty in Iran, Opec's third largest producer, is also helping to support the price as citizens are again protesting the government", said by William O'Loughlin, investment analyst at Australia' Rivkin Securities.

WTI Crude Oil Price Hits 60 bbl, Highest Since Mid