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Following the crude oil prices’ upward movement at the beginning of the year up until the trading session this week until Thursday’s trading, oil prices are now below a three-year high following the incredibly bullish move of the commodity in the past trading session.

Crude Oil Two-Week Rally

Due to the market optimism largely led by the ongoing production cuts from the Organization of Petroleum Exporting Countries as well as other participating non-member countries to cut as much as 1.8 million barrels per day as a part of their efforts in boosting and pushing oil prices higher as well as preventing a global oversupply.

The deal which was originally set to end in March this year has been extended until the end of 2018 by the OPEC as well as a number of participating non-OPEC members like Russia who happens to be one of the biggest producers in the world. The deal was announced by Saudi Arabia Energy Minister Khalid al-Falih who stated that they have agreed to extend the cuts by another nine months until the end of 2018.

Crude oil prices then have rallied continuously with most oil prices hovering near a two and a half year high and a three year high as the markets continuously raised overall positive sentiments and upbeat price targets for the commodity.

Last year, most oil prices have recovered from trading below the $40 level due to the growing market hopes of the OPEC extending the deals again with oil prices touching near above the $50 per barrel price level if not for the sudden rise in U.S. crude inventories that offset the gains of crude oil prices.

However, the decline in crude inventories in the United States during the latter half of 2017 have helped oil prices recover and rally further before the year ends trading to as high as $68 per barrel during the first trading session of 2018.

Oil Price Direction

Despite trading mostly higher by Friday’s trading session and from previously trading above $70 per barrel, Brent crude futures are now at around $69.26 which is six cents shy from previously touching a three year high from the highest price seen since December 2014.

During the last quarter of 2017, most oil prices have started its path to higher and more stable oil prices touching near the $60 level and breaking out a number of times before being offset by the sudden rise in crude inventories from the United States.

The initial announcement from a number of OPEC participants of a possible extension during the second half of 2017 has also sparked a positive market outlook regarding the recovery of oil prices as well as various reports of growing demand for crude in a number of countries.

Most oil futures was not able to hold on to its recent gains ending the recent trading session in the red with the Brent benchmark trading to as much as $70.05 per barrel during the early morning trading session.

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