Oil prices hit their highest levels since July 2015 early on Monday as markets tightened, while Saudi Arabia’s crown prince cemented his power over the weekend through an anti-corruption crackdown that included high profile arrests.
Brent futures LCOc1, the international benchmark for oil prices, hit $62.44 per barrel early on Monday, their highest level since July 2015, and after a dip regained that level by 0625 GMT. This is over 40 percent above June’s 2017 lows.
U.S. West Texas Intermediate (WTI) crude CLc1 hit $56 per barrel in early trading, also the highest since July 2015, and was at $55.86 at 0625. WTI is one-third higher than its 2017 lows.
In oil fundamentals, traders said that there were ongoing signs of tightening market conditions.
U.S. energy companies cut eight oil rigs last week, to 729, in the biggest reduction since May 2016.
The decline in U.S. drilling activity comes as the Organization of the Petroleum Exporting Countries (OPEC) and a non-OPEC group lead by Russia have pledged to hold back about 1.8 million barrels per day (bpd) in oil production to tighten markets.
The pact to withhold supplies runs to March 2018, but there is growing consensus to extend the deal.
While supplies are tightening, analysts say demand remains strong.
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