Further gains will be hard to come by as USA production threatens to undermine the Organization of Petroleum Exporting Countries' attempt to cut down the global supply glut.
Despite the ludicrous turn of discussions in that meeting, the oil firms in the end still expressed their willingness to submit their inventories - but primarily informing the DOE first of which inventories they can still sell without the enforced excise taxes under the TRAIN Act.
Since fuel prices are not regulated anymore, oil marketing companies (OMCs) do daily revision of petrol and diesel prices, in tandem with global rates. This policy then led to a rise in global oil prices that also affected the ICP.
Potentially undermining the trend towards tighter market conditions is USA oil production C-OUT-T-EIA, which has risen by nearly 16 percent since mid-2016, hitting 9.75 million barrels per day (bpd) at the end of past year.
2018 outlook and forecast: The price of Dubai crude is expected to rise this year and trade in the range of $55-60 per barrel. Crude inventories slid by 7.42 million barrels last week, also the biggest decline since August, according to government data Thursday.
High Court of Madras directs striking Transport to resume work from today
Palaniswami, in the state assembly on Tuesday, urged workers to accept the government's offer and withdraw the strike. The workers have reportedly returned to work and have resumed their work starting this Friday.
But the more prices increase, especially with Brent prices near $70, and WTI prices above $60, the more likely USA shale drilling and production rates will accelerate, which will tend to frustrate the objective of lowering stocks.
OPEC estimates that total stocks were around 137 million barrels higher than the five-year average in October, down by around half since May (Monthly Oil Market Report, OPEC, December 2017). "That, coupled with the rebound in US production is helping to undercut some of the recent price strength". Output from producers outside Opec will continue to grow by an average of 1.3 million bpd, the IEA forecast in December. Many producers, still suffering from a 2014 price collapse, are enjoying the rally and the extra revenues. Brent, the global benchmark, fell 35 cents, or 0.51%, to $67.72 a barrel on ICE Futures Europe.
"This justifies a certain risk premium on the oil price, though this should already be more than sufficiently reflected in the current price level", the Commerzbank analysts wrote in a note Wednesday.
For now, OPEC members are sticking with the production quotas.
The US Energy Information Administration is already forecasting US shale output to increase by 780,000 b/d in 2018, more than double the 380,000 b/d it expanded by previous year.