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Oil at $70/barrel for first time in 3 years as production cuts by Opec

Rising prices are putting US production on track to rival both Saudi Arabia and Russia, with output likely to exceed 10 million barrels a day as soon as next month

Grant Smith & Ben Sharples | Bloomberg 

oil price, opec, Organization of Petroleum Exporting Countries,Brent crude,US, Russia, Saudi Arabia,US shale oil,Iran,Bijan Namdar Zanganeh
Oil at $70/barrel for first time in 3 years

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. futures, used in the pricing of more than half the world’s oil, rose as much as 1.2 per cent to the highest since December 4, 2014. Prices rallied after the longest stretch of declines in inventories during winter in a decade. Oil’s rally shows that the and its allies are succeeding in clearing the glut triggered by the growth of shale oil. Prices have also been supported by concerns that supply disruptions could stem from rising political tensions in members and Venezuela. “Pretty much all of the fundamental boxes are supportive of the current rally and a bit more,” said Paul Horsnell, head of commodities research at Standard Chartered Plc in London. Brent for March settlement advanced to $69.90 a barrel on the London-based ICE Futures Europe exchange at 11:28 Eastern time. oil price, opec, Organization of Petroleum Exporting Countries,Brent crude,US, Russia, Saudi Arabia,US shale oil,Iran,Bijan Namdar Zanganeh (in $/bbl) With the climb in crude, there are growing signs that could be falling into a trap it had sought to avoid.

Rising prices are putting production on track to rival both and Russia, with output likely to exceed 10 million barrels a day as soon as next month and top 11 million before the end of 2019, according to Information Administration forecasts. “Seventy dollars is too much,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “It’s not completely unexpected, given the price momentum. But there will be a reaction in shale, and Opec’s strategy will backfire massively.” has warned that the group risks overheating the market with oil at current levels. Opec’s members aren’t keen on Brent prices above $60 a barrel because of the potential for more shale output, Iran’s Oil Minister said, according to the ministry’s news service Shana.

First Published: Fri, January 12 2018. 02:01 IST
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