Crude Oil Loses Steam After Touching 2015 Highs
Brent Crude ultimately starts losing after an extreme rise to $68.27 on January 5, 2018. January 6, 2018, ended with $67.57, a loss of 50 cents, or in other words 0.7%. January 5, 2018, was the highest rise since May 2015.
After the political turmoil that took place in December 2017, oil prices had seen immense highs. This came down on Friday, political and supply reacted issues being controlled by one of the members of OPEC (Organization of the Petroleum Exporting Countries), Iran.
US West Texas Intermediate (WTI) price was $61.40 per barrel by 11.40 GMT on January 6, 2018, which is 1% lower than the previous day. WTI oil prices per barrel stood at $62.21, the highest since May 2015.
The prime cause of such hike in oil prices have been the geo-political tensions in the international oil market, to be specific, Iran. As per a report by Norbert Ruecker, the head of commodity research at Swiss Bank Julius Baer, the protests made by Iranian public against the government fuelled the rise in oil prices throughout the global oil market.
To bring oil prices in control, Russia and the other OPEC members took initiatives from last year January. Initiatives included reduction in production and enhanced economic and financial growth.
In recent times, the US commercial crude oil inventories crossed 10 million barrels per day; this is the highest after Russia and Saudi Arabia. The political crisis of Iran is not supposed to affect the international market and as per Bank Jefferies, oil market will remain undersupplied throughout 2018.
Some even feel that the US shall be a threat to the higher oil prices in the world. Crude prices above $60 per barrel is considered to be a rosy picture by many and Mr Ruecker, from Julius Baer sets expectations not quite positive for oil prices this year.