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Economics Gazette

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October 22, 2019

Crude oil price reached a 30-month high during the last session of the year

Crude oil priceThe crude oil price continued to rise during the last session of the year and managed to reach a 30-month high. The futures on US light crude oil with delivery in February reported an increase of 0.69% to 60.25 USD per barrel. The price of the Brent oil rose by 0.71% to 66.63 USD per barrel.

The trade was backed by data on the surprise decline in US production as well as strong demand from China. The oil production in the US is down to 9.754 million barrels per day. By comparison, production reached 9.789 million barrels per day in the previous week.

Since early 2017, the Brent and WTI crude have risen by 17% and 12% respectively, although growth has even reached 50% since the middle of the year. The US production grew by nearly 16% since mid-2016, as most analysts expected to cross the 10 million barrels per day by the end of 2017. By comparison, production is currently only higher in Russia and Saudi Arabia.

At the same time, China issues crude oil import quotas for a total of 121.32 million tons for 44 companies in its Q1 2018. Based on total expected quotas, China imports about 8.5 million barrels per day, being already the largest in the world and is expected to reach a new record in 2018.

In the markets, the price of oil is supported by the decision of the Organization of Petroleum Exporting Countries to reduce production by the beginning of 2017, and this is expected to continue in 2018. The problems around the North Sea and Libya pipelines also put pressure on the prices, but both are expected to run at full speed in early January.

Gold also rose in its last session in December on the Asian markets. The futures with delivery in February were exchanged for 1,298.40 USD per ounce, with their price rising by 0.09%.

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