Following the crude oil prices upbeat momentum at the beginning of the year due to the overall production cuts led by the Organization of Petroleum Exporting Countries which is extended until the end of 2018, most crude oil prices are now trading to as much as $68 per barrel which is one of the highest the market has seen since 2015.
Two Year High
From the previous week until during the most recent trading session, oil prices were seen to hit and trade the $70 per barrel level which is a two and a half year to as high as a three-year high on the market’s improving outlook regarding the direction of most crude oil prices in the coming year.
While the OPEC has led production cuts as early as late 2016, the doubts of the market on how the efforts could lead a price recovery and help curb a global crude production oversupply has failed to push oil prices higher until the second half of 2017 where the efforts of the organization have been offset by the rising U.S. crude production.
Despite the continuous efforts of the OPEC during the first two quarters of 2017, the markets have raised back then the issue to whether the U.S. crude production which has been rising continuously then led to speculations on the country’s growing role in the global crude market scene. Oil prices were trading below the $50 level during the beginning of 2017 on market doubts on the OPEC to help push oil prices higher in the midst of growing output from non-OPEC members.
However, the announcement of the OPEC back in November to extend the production cuts for the third time throughout the year 2018 as well as a growing demand for crude oil in a number of countries and also supported by Russia’s participation in the production cuts despite not being a member of the OPEC has overall improved market optimism and pushed oil prices to levels not seen since the past two to three years.
Oil Price Movement
As most oil prices traded to $68 per barrel during Tuesday’s trading session, the international benchmark Brent crude traded up by 32 cents reversing its previous losses and traded to $68.29 per barrel which is the highest seen since May 2015.
U.S. crude prices also traded $62.10 per barrel representing a rise of 37 cents, also the highest seen since May 2015. Also during the previous trading session, crude oil prices rallied on reports of a decline in U.S. rig count further supporting the improving market sentiment.
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