Brent oil has come close to $70/b. It’s interesting to note that Brent oil has reached this level for the first time since 2014. At the same time, international experts now seem to be overwhelmed by mixed feeling about that.
According to NordFX, ICE Brent futures (London) for March delivery cost $62,2/b after gaining 0,5% on that day and 3,1% since the start of the trading week. WTIfuturescost $63,5/baftergaining 0,8% onthatday.
Experts say that the American Petroleum Institute (API) published another report, which says that the U.S. crude oil inventories had shown the biggest drop in 18 years driven by really big demand.
It’s also interesting to note that crude oil prices have increased by 115% over the last 2 years. Most of the price rally was triggered by the so-called OPEC+ agreement signed in late 2016.
At first sight, we could think that those oil nations who signed the oil agreement can now celebrate since at 75 dollars per barrel, for example, Russia and Saudi Arabia could eliminate most or even all of the budget deficit.
On the other hand, Commerzbank experts say that the OPEC and their OPEC+ allies can help their shale rivals to strengthen their position in the global market amid higher oil prices, which is something they don’t want. So, even though the prices have been growing so far, this is not victory for the OPEC and Russia. So, the higher oil prices will go, the more shale oil will eventually be shipped to the global market.
