It has taken 500 days and the sacrifice of almost a billion barrels in lost oil output for the global crude market to eradicate a deep supply surplus, but oil prices have now hit OPEC heavyweight Saudi Arabia’s desired level of $80 a barrel.
Brent crude futures reached an intraday high of $80.18 on Thursday, breaching the $80 a barrel level for the first time since November 2014.
A vast overhang of unwanted crude stocks has now vanished, investors are buying into the oil price rally more than at any time in the last four years and market watchers are beginning to talk again about oil prices returning to $100 per barrel and more.
Renewed U.S. sanctions on Iran that could seriously hamper the country’s oil exports, along with involuntary output declines in big producers such as Venezuela, Mexico and Angola have contributed to the bounce in the price.
Led by Saudi Arabia, the Organization of the Petroleum Exporting Countries and 10 of its partners including top producer Russia have cut their crude output by a joint 1.8 million barrels a day since January 2017. Read More