Without a doubt, 2017 has been a big year for oil. After falling to record lows in 2015 and 2016 as a result from a heavy oversupply in the market, this year OPEC implemented massive production cuts that bore fruit. Just a few days short of 2018, oil seems to be at two-and-a-half years’ highs.
Oil was gradually stabilizing during 2017 and November’s decision by OPEC to extend their production cuts into 2018 was a step in the direction of a more balanced market. In addition, the price of oil has been boosted by other events that have to do with the current supply of oil on the market. Just this week a major oil pipeline in Libya burst, limiting the flow of oil in the region dramatically, which drove the price further up and over $60 per barrel.
This week we also learned of somewhat lower crude oil supplies in the United States. Furthermore, another boost for the price of oil came from China, which announced its oil quotas for 2018. As the world’s biggest importer of oil, massive demand from China is good news for fixing the oversupply issue.
Currently the WTI futures are trading around $59.82, while the Brent crude is at $66.68 per barrel.
