Published: Mon, January 08, 2018
Markets | By Rosalie Gross

Oil Price Rises Above $68, Highest Since 2015

Oil Price Rises Above $68, Highest Since 2015

Crude oil prices climbed in 2017 and the Brent-West Texas Intermediate spread has widened, according to the Energy Information Administration.

U.S. West Texas Intermediate and global benchmark Brent crude oil rose to their highest levels since early 2015 on Thursday, on concern that the escalation of unrest in Iran will eventually have an effect on supply and another decline in U.S. inventories as refining activity hit a 12-year high. That was 61 cents, or 1 percent, below their last close.

Oil hit its highest since May 2015 this week, supported by falling inventories, strong demand and high Opec compliance.

Brent crude futures LCOc1 lost 50 cents, or 0.7 percent, to $67.57.

It also said based on data through October, average USA imports of crude oil increased by more than 103,000 BPD from the 2016 level, to almost 8.0 MMBPD, the highest level since 2012.

OPEC, supported by Russian Federation and other non-members, begun to hammer out a deal to cut supplies again in 2016, aiming to lift prices by removing a glut built up in the previous two years.

Both benchmarks gained nearly 1.5% in the week when compared to the last week of 2017, as the oil market was seen still tightening and the bullish mood was fuelled by new factors. USA commercial crude inventories C-STK-T-EIA fell by 7.4 million barrels in the week to December 29, to 424.46 million barrels, according to data from the Energy Information Administration (EIA).

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Net U.S. crude imports fell last week by 292,000 barrels per day.

That is down 20 percent from their historic peaks last March and close to the five-year average of 420 million barrels.

Bank Jefferies said the oil price "upside from here is not obvious to us" but added that it expects the oil market to remain undersupplied through 2018.

Pipeline outages in Libya and the North Sea have supported oil prices, although both disruptions are expected to be resolved by early January.

Crude oil prices ended 2017 at $60 a barrel, the highest end-of-year price since 2013, EIA said.

USA oil prices closed above $60 a barrel on the final trading day of the year, the first time since mid-2015, as the commodity ended 2017 with a 12 percent gain spurred by strong demand and declining global inventories.

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