Oil Could Return to Triple-Digit Prices

Jeannie Matthews
April 20, 2018

Global benchmark Brent crude gained 3.2 percent, reaching $73.91 a barrel - its highest level since November 27, 2014, according to official data.

OPEC and its partners will meet in Jeddah, Saudi Arabia, on April 20. Focus is now shifting to whether OPEC and its allies will signal an extension of supply cuts at their meeting on Friday in Saudi Arabia. US gasoline demand surged to a record high of 9.9 MMbbl a day before the summer driving season when consumption typically peaks.

The cartel's supply cut appears to be working because prices are rising at a time when US oil put is reaching near record levels and continuing to rise. While demand has yet to catch up to elevated supplies, rebounding economies in Europe and steady economic growth in the USA could prompt more upside for oil this year.

Saudi Arabia announced their desire to see the prices reach $80-100 per barrel on Wednesday, causing oil to jump $2 (3%) to $73.40.

"The Saudis and their colleagues in OPEC need higher oil for their fiscal positions and the Kingdom is on a bold and costly reform programme".

"Do not underestimate the higher price impact on demand.the outlook remains uncertain despite higher prices and a tighter market", Pouyanné said at an industry event.

California opens investigation into Tesla's workplace conditions
Tesla's statement followed a post from February, in which the company highlighted its efforts to improve worker safety at the Fremont factory.

McKayla Maroney Says Larry Nassar Molested Her 'Every Time He Saw Me'
The fact is that USA Gymnastics, the USOC, MSU and everyone continued to look away-all they cared about was money. She said speaking out about her experience in October, amid the #MeToo movement, took a weight off her shoulders.

Cadillac president departs as turnaround hits snag
Carlisle's highlights, said David Paterson, GM Canada's vice-president of corporate and environmental affairs. The GM veteran joined the company in 1982 and once served as vice president of USA sales operations.

To be sure, OPEC and Saudi Arabia have no official price target and say the objective of the production cut is to balance supply and demand, and reduce the inventory glut.

"If oil prices were to move toward $80 a barrel and euro weakened a bit, there could be some inflation pressure", said Rabobank's head of macro strategy Elwin de Groot. USA gasoline stocks fell by 2.968 million barrels to 235.967 million barrels, while distillate stocks fell 3.107 million barrels to 125.34 million barrels.

Yields on USA two-year Treasuries stood at levels last visited in 2008 at 2.43 percent.

At current levels, futures are approaching levels not seen since Thanksgiving of 2014, when OPEC refused to take steps to stop a decline in oil prices, sparking an even sharper drop.

"We will know what will be the good price when the market is balanced and we have enough investments", the United Arab Emirates' energy minister, Suhail al-Mazroui, told Reuters last week.

The Joint Ministerial Monitoring Committee (JMMC) will make a recommendation to OPEC about whether or not the production cut deal should be extended into 2019. "This is a temporary phenomenon, so we will get additional pipeline capacity coming on by mid-next year and over the course of the next 12 to 15 months", he said. "We have to test it".

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER