Those risks have risen in the past two days after Iraq on Sunday urged countries to stop oil trade with its autonomous Kurdistan region in retaliation for the vote, and Turkish President Tayyip Erdogan threatened on Monday to cut off the Ceyhan pipeline that carries the Kurdish region’s entire oil output to the outside world. The EIA revised down its 2017 annual United States oil production growth outlook marginally to 450,000 b/d in its latest monthly report two weeks ago, from the 500,000 b/d predicted in August, the most bullish forecast this year.
He said the oil firm had varied interests in seven deepwater concessions and successfully executed a Global Memorandum of Understanding (GMoU) with communities in OMLs 30 and 34, adding that NPDC achieved a major feat by successfully drilling and completing five horizontal wells in nine months in OML 26, leading to production of an additional 7, 000 bpd.
“The market was approaching if not in overbought territory”, Robert Yawger, director of energy futures at Mizuho Americas.
The prices of crude oil hit a new 2017 high Monday, continuing a rally fuelled by improving demand and expectations that the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC producers will extend output cuts.
Mohammed Barkindo, OPEC’s secretary-general, said: “So for the foreseeable future, we can count on the Asia Pacific to be the primary outlet for OPEC and Middle Eastern export barrels”, according to the FT. USA crude was down 7 cents a barrel at $51.81.
The price of OPEC basket also rocketed by 1.14 cents surging to a $52.82 per barrel.
Janet Kong, Eastern Hemisphere chief executive officer of integrated supply and trading at BP, said while rebalancing is underway, OPEC needs “definitely to cut beyond the first quarter” to bring inventories down and back to historically normal levels and to offset persistent overproduction from renegade members such as Libya and Iran.
The age of persistently weak oil prices is nearing its end, with demand booming and a supply squeeze in the offing, according to Trafigura Group.
Technological improvements and greater efficiency has helped USA shale producers pump out crude oil at lower margins – some say it is now profitable at less than $50 per barrel.
However, other analysts were sceptical about further price gains due to higher oil output from the US.
OPEC and other oil exporters declined on Friday to extend their agreement to limit production in a bid to drain a global glut that has weighed on prices for three years.
Earlier this month, the International Energy Agency (IEA) revised upwards its forecast for oil demand growth this year to 1.6 million bpd from the previous estimate for 1.5 million bpd growth. On Friday it said the reduction had helped to lift oil prices by about 15% in the past three months.