U.S. oil prices reached their highest levels since the middle of 2015 during the final trading day of the year. This was when buying of the commodity was fueled due to a sudden drop in commercial crude inventories.
Brent crude oil futures climbed as supply cuts by OPEC and Russia continues. It was also supported by China’s strong demand.
U.S. West Texas Intermediate (WTI) crude futures were at $60.30 per barrel by0504 GMT. It rose 0.8 percent or 46 cents from previous close. This was the highest listed level since June 2015.
The international benchmark Brent crude futures also increased, adding 45 cents or 0.7 percent to $66.61 per barrel. For the first time since May 2015, Brent broke through the $67 mark earlier this week.
WTI and Brent have risen by 12 and 17 percent respectively since the beginning of the year. Price increases almost reached 50 percent from mid-2017.
The WTI price rises on Friday were sustained by a sudden drop in the U.S. oil production. The Energy Information Administration (EIA) released data on Thursday. According to it, the productions fell to 9.754 million barrels per day (bpd) from 9.789 million bpd last week.
U.S. output still rose around 16 percent since mid-2016. Despite this, analysts’ projections were more than 10 million bpd by the end of 2017. Such level was only surpassed by top producer Russia and top exporter Saudi Arabia.
A drop in U.S. commercial crude storage levels further supported the WTI price rises. It fell by 4.6 million barrels in the week leading to December 22 to 431.9 million barrels. This is still according to the EIA data.
Inventories have fallen by almost 20 percent from the historic highs listed last March. It is also well below the same month in 2015.
Oil Cuts 2017: International Markets
China released crude oil import quotas with a total of 121.32 million tons. This was for the 44 companies involved in the first batch of 2018 allowances.
China’s imports are already expected to reach another record in 2018 due to new refining capacity being brought online. Additionally, Beijing will be allowing crude imports from more independent refiners by next year.
Oil prices were also supported by pipeline outages in Libya and the North Sea. However, both outages were expected to be resolved by early January.
The pipeline outages had “no major impact on exports,” JBC Energy said.