Oil Prices open the week higher

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $61.50 a barrel at 0800 GMT, 6 cents above their last settlement. Futures reached $62.21 last week, the most since May 2015.

Brent crude futures LCOc1 were at $67.66 a barrel, 4 cents above their last close. Brent hit $68.27 high last week, the highest since May 2015.

 Traders said the gains were due to a slight decline in the number of U.S. rigs drilling for new production, which eased by five in the week to Jan. 5 to 742, according to data from oil services firm Baker Hughes.

Despite this, U.S. production C-OUT-T-EIA is expected to break through 10 million barrels per day (bpd) very soon, largely thanks to soaring output from shale drillers. Only top producers Russia and Saudi Arabia produce more.

Rising U.S. production is the main factor countering production cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) and by Russia, which began in January last year and are set to last through 2018.

 Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore, said “the OPEC vs shale debate will rage” this year, being a key price driving factor.

However, Innes added that Middle East turmoil would remain a key focus for oil markets, which he warned had the potential to “send oil prices rocketing higher”.

Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

Latest posts by Stephen Innes (see all)