By: Mohamed Farouk
Mubasher: Kuwait's crude oil prices have seesawed in 2017 on the back of a slew of changes caused by several economic and political factors.
The Kuwaiti crude oil price rose by 16.4% year-on-year to $8.5 per barrel (pb), up from $51.87 pb the previous year.
Oil cut deal
The Organization of Petroleum Exporting Countries last year announced it had reached a six-month pact with OPEC and non-OPEC members over curtailing oil output as of January 2017 for the first time since 2008.
The agreement entailed reducing OPEC's production by 1.2 million barrels per day (bpd) to 32.5 million bpd. A five-member committee was set up to monitor oil output cuts by OPEC and non-OPEC producers.
Earlier this year, Kuwait's former oil minister Essam al-Marzouk affirmed that his country is keen to put its deal with OPEC into effect, in addition to monitoring demand and supply updates in the oil market.
International crude prices
As for the global crude prices, analysts forecast that oil prices would rebound after prolonging oil cut deal, expecting oil prices to range between $55 and $58 pb during 2017 and 2018.
On the flipside, analysts early 2017 projected that Kuwaiti oil price would swing between $50 and $53 pb, with possibility to hover over this level in case crude stocks have seen successive reductions in the fourth quarter of 2017.
Meanwhile, the Kuwaiti unclear economic situation and regional geopolitical scene have taken their toll on the GCC state’s crude oil prices in mid-2017, pushing oil price to hit its lowest level at $41.89 by the end of June 2017.
Oil price rebounds
By the end of the third quarter of 2017, oil prices improved after a reduction in US crude inventories with projections that global oil demand to recover, in addition to compliance of OPEC and non-OPEC members to oil reduction deal.
These factors have contributed to increasing international crude prices that in return boosted Kuwaiti oil prices.
By the last quarter of the current year, analysts had more positive expectations about global oil prices, forecasting crude prices to range between $60 and $70 pb, particularly if the reduction in drilling rigs in the United States would carry on.
Asia's unprecedented demand, especially in China and India, has also levelled up the international oil prices.
Kuwaiti oil prices have seen their highest level in 12 December session, hitting $61.63 pb.
Translated by: Kholoud Mohamed Hussein
