- Oil Nears $75 as Saudi Seeks Price Hike
Oil prices rose yesterday to their highest since late 2014 as U.S. crude inventories declined after sources said top exporter, Saudi Arabia, is seeking to push oil prices higher.
Brent crude oil futures rallied as high as $74.44 a barrel, the strongest since Nov. 27, 2014, the day the Organisation of Petroleum Exporting Countries (OPEC) decided to pump as much as it could to defend market share.
Brent futures were at $74.35 per barrel, up 87 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures rose 71 cents to $69.18 a barrel. WTI had earlier hit $69.27, its best level since Dec. 2, 2014.
“Oil prices continued to climb on Thursday as a decline in U.S. crude inventories and commentary from Saudi Arabia that it will be happy to see crude rise to $80 or even $100 helped boost prices,” RBC said in a note.
OPEC and other major producers including Russia started to withhold output in 2017 to rein in oversupply that had depressed prices since 2014.
OPEC and its partners will meet in Jeddah, Saudi Arabia, on April 20. OPEC will then meet on June 22 to review its oil production policy.
Since the start of the supply cuts, crude inventories have gradually declined from record levels toward long-term average levels.
Further supporting oil prices is an expectation that the U. S. will re-introduce sanctions against Iran, OPEC’s third-largest producer, which can result in further supply reductions from the Middle East.
August 2014 was the last time oil prices above $100 a barrel, but technical analyst Louise Yamada says the charts aren’t ruling out a return to triple digits.
When asked if crude was never going to return to $100 a barrel on CNBC’s “Futures Now,” Yamada replied “not necessarily,” though emphasised that there are a few key levels that oil needs to hit first on the way up.
“There are headwinds for oil, and remember that it’s been down almost 80 per cent since 2008 and from the 2011 high. “And I think if you were to get to these targets, you’re going to be running into the resistance of that four-year breakdown in 2014,” she said.
But in the short term, the managing director of Louise Yamada Advisors does see crude running up to $78, thanks to some bullish formations in the charts.
“This rally in oil has been a very slow-moving six-month process. But we do have (a) measured target from a head and shoulders that has been in place for three years that could take us to $75 or $78, where you run into the major resistance from the four-year breakdown in 2014,” she added.
