- Global Oil Prices Surge on Iran Unrest
The unrest in Iran is fueling surge in global oil prices as investors expect further tightening in global oil supplies amid the perceived drop in the U.S. crude stockpiles.
Brent crude oil advanced to $67.06 a barrel on Wednesday, while the U.S. oil, WTI jumped to its highest in almost two years to trade at $60.87 a barrel.
This, experts attributed to the unrest in OPEC’s third-biggest producer Iran and the projected 5 million barrels drop in the U.S. crude inventories report due on Thursday.
Since OPEC capped production in November 2016, global oil prices has risen more than 50 percent to boost commodity-dependent economies like Nigeria, that upped its foreign reserves by 50 percent in 2017 alone.
Even with the counterproductive activities of the U.S. Shale, OPEC and its allies have been able to trim down global supplies and artificially boost oil prices. However, while oil prices remained at a two-year high, prices are more likely to trade between $43 and $62 a barrel in 2018 because of global uncertainties that will likely force investors to hold back ahead of Brexit and geopolitical happenings.
“The U.S. shale-OPEC tug of war will simultaneously cap upside price potential and downside risks,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London.
