Mubasher: Oil prices extended its gains on Tuesday, on the back of positive forecasts for next year.
Brent crude oil went up 0.8% to $61.37 per barrel, exceeding the level of $61 for the first time since December 2014, and recording total monthly gains of 8% during October.
Meanwhile, Nymex futures increased by 0.4% to $54.38 per barrel, rising by 5.2% this month.
A recent Reuters’ poll showed on Tuesday that oil will most likely continue to rise in 2018, especially with as the highly anticipated extension of the OPEC-led output restrictions offsets higher US production.
Brent was forecast to average $55.71 next year, the poll showed.
Market experts are forecasting a growth in oil demand for the remainder of 2017 and in 2018 to average about 1.5 million to 1.7 million barrels per day, mainly driven by Asian markets, especially China and India, according to Reuters, adding that a rise in oil prices could encourage higher US shale output.
The Organization of the Petroleum Exporting Countries (OPEC), and other major non-OPEC producers including Russia agreed to cut output by around 1.8 million barrels per day from 1 January 2017 until March 2018.
An OPEC summit will be held in Vienna on 30 November to decide on the output policy, and OPEC officials have said the supply-cutting pact is likely to be extended beyond March.
Compliance with the agreed production cuts reached 120% in September.
OPEC Secretary General Mohammad Barkindo said that Saudi and Russian backing for an extension cleared the fog before the meeting in Vienna.
The rise in oil prices also comes amid concerns regarding Iraqi oil supplies, after northern Iraq production recently stopped, days after the Iraqi government regained control over the disputed area, which increased concerns regarding inflows from the second largest OPEC crude producer.
The National Iraqi News Agency (NINA) reported that Iraqi North Oil Company (NOC) and the Kurdish KAR Group are working to resume operations in the Avana and Bai Hassan oil fields in Kirkuk, which was halted due to the Iraqi military operations to restore the region from Kurdish fighters.
The UAE minister of energy, Suhail Al Mazroui said that oil markets need an extension of the OPEC production cut agreement after March 2018.
