Oil hits highest prices since mid-2015, then dips

Brent Delta Oil Rig Platform Rests In Seaton Port

Opec began its production cuts in 2017

Maintain neutral: West Texas Intermediate (WTI) crude oil prices finally breached the US$60 (RM241.20) per barrel threshold, up 5% since the beginning of December 2017, as Brent moved in tandem, rising by 7% to US$67 per barrel.

Today, the commodity is extending gains as it hits a high of $60.74 - highest level since June 2015. At 0705 GMT, February WTI crude oil is trading $60.38, up $0.01 or +0.01% and March Brent crude oil is at $66.56, down $0.01 or -0.02%. Repairs were also completed on a Libyan oil pipeline which was damaged in a suspected terrorist attack last week.

One member of the security forces was reported killed yesterday, bringing the death toll to at least 14.

The rally was spurred by anti-government sentiment in Iran and ongoing supply cuts led by OPEC and Russian Federation, according to CBC News Canada.

The protest is the boldest challenge to the clerical leadership since unrest in 2009. "But Iran needs customers for that oil and the U.S. sanctions will target the customers buying that extra 1 million barrels per day".

"The market wants to see if the tension actually leads to disruption", said Phil Flynn, senior market analyst at Price Futures Group in Chicago.

Large supplies of crude will head to Asia to satisfy strong demand from the region, analysts said.

The research house explained that the reason for maintaining its crude oil forecast was due to the increased optimism stemming from the post-continuation of Organisation of the Petroleum Exporting Countries (Opec) production quotas, geopolitical concerns in the Middle East amid concerns of a USA shale oil resurgence.

The agency made this prediction in its 2018 credit trends report for the global oil and gas industry.

U.S. exports to Asia have already increased with higher Middle East oil prices because of the OPEC-led output cuts and a wide WTI-Brent spread.

The agreement came into effect in January 2017 and will continue through the end of 2018.

Freezing weather in the United States has also spurred short-term demand, especially for heating oil.

Supplies were healthy. US oil production has risen by nearly 16 per cent since the middle of 2016, hitting 9.75 million bpd at the end of a year ago. But, increased USA production, which nearing surpassing 10 million bpd, is hindering 2018's outlook.

A record net long position has been accumulated by hedge funds and other money managers, amounting to 1,183 million barrels in the five biggest futures and options contracts covering crude, gasoline and heating oil.

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