Brent, WTI Prices Hit Highest Since 2014

Evarado Alatorre
Abril 25, 2018

Oil prices will continue growing, Bloomberg reports with reference to hedge funds that invest in "black gold".

Analysts also forecast a fall of 625,000 barrels for gasoline stockpiles, while distillate inventories are expected to drop by 861,000 barrels.

"The recent rise in oil prices will lead to a short-term reduction of pressures on GCC governments' balances sheets by reducing fiscal deficits and slowing the build-up of government debt", analysts at Moody's said.

The prices of oil collapsed post that time due to an oversupply of crude oil in the market. The panel tasked OPEC's Secretariat to look into different metrics with deep analysis of market uncertainties. "With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!".

USA oil gained in popularity, sources said, in part because of the wide gap between West Texas Intermediate, the US benchmark, and dated Brent, which is more expensive and sets the price for most of the world's crude grades.

Last week, USA producers pumped 10.54 million barrels daily.

OPEC ministers profess to be unconcerned about the impact on either supply or demand, but they have often misjudged market responses in the past.

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Investors are also assessing USA inventory levels, with supplies seen declining last week, according to a Bloomberg survey ahead of Energy Information Administration data released on Wednesday.

Oil broker PVM's Tamas Verga states that the probability of the U.S. staying in the nuclear deal with Iran is low.

Dugan avoided making any hard forecasts about how crude might perform if US president Donald Trump cancels the Iran nuclear deal next month after all and imposes sanctions, preferring only to state that such sanctions could have "a range of outcomes whether it's hard or soft".

Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA, said new sanctions against Tehran "could push oil prices up as much as US$5 per barrel".

Oil prices have rallied over 20% since early February and nearly 70% since last year's low seen in June as joint production cuts between OPEC and Russian Federation have halted the supply side while continued global growth has increased demand as well.

Meanwhile, West Texas Intermediate gained 48 cents or 0.70 per cent to $69.12, while global benchmark Brent advanced by 32 cents or 0.43 per cent to $75.03 a barrel.

To counter OPEC's actions and reduce the USA economy's vulnerability to rising prices, the US has a full suite of solutions, such as the formation of an energy security commission that will investigate how the actions of OPEC members and other petrostates undermine US consumers and producers. USA output, supported by high prices, has hit record levels.

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