Oil prices have hit a three-year high, reaching almost US$70 a barrel, signaling a strengthening outlook for the sector in 2018.
US West Texas Intermediate (WTI) crude futures were at $63.45 a barrel, down 35c.
The S&P energy sector closed up 2 per cent as Brent crude went above $70 a barrel for the first time since December 2014, boosted by a surprise drop in US production and lower crude inventories. Novak said the current oil price was short-term, and he would discuss the situation at a ministerial monitoring committee meeting in Oman, scheduled for January 21. Markets remained buoyed by the comments throughout the session, shrugging off data that suggested the US production may continue to surge.
Olivier Jakob, managing director of PetroMatrix, noted, "We're still drawing USA stocks and that continues to support a very positive sentiment", and he added that physical Brent above $70 per barrel will surely trigger discussion among Organization of the Petroleum Exporting Countries (OPEC) members about the need to continue their crude output cutbacks.
"Brent oil will remain range bound in the Dollars 65 region until there is more clarity on the U.S. counter-move", it added.
Most of the production growth, the EIA noted, will be in the Permian Basin.
Suhail al-Mazrouei, the UAE oil minister and Opec president, said it was committed to limiting output until the end of the year. But now we are talking about a whole new trajectory, in which the oil price is flirting with $70 per barrel and on its way to hit even $80 per barrel soon.
The OPEC doesn't seem to be interested in oil prices above $60/b.
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.
OPEC's aim is to ensure the stabilisation of oil markets. The U.S. Energy Information Administration this week said it expects Brent to average $60 per barrel for the year, up from the $54 per barrel average for 2017.
Amid the rising price of oil, Citi's latest research on how Wildcard's could affect the markets in 2018, includes details on what could push the price of Brent crude oil up to $80 per barrel.
As of Wednesday, the oil price touched $69.26 per barrel, the highest since June, 2015.
"But if short-term influencers like the Iranian protests and Venezuela production issues were to be sorted out, a sharp price reversal could very well be in the cards".