Oil hits highest since mid-2015, then dips

Brent and West Texas Intermediate oil prices will probably oscillate between $40 and $60 a barrel this year, penned in by rising USA shale production, declining but still hearty global supplies and eroding compliance with OPEC-led output cuts, the ratings agency said in a report Tuesday.

In the week ended December 29, 2017, U.S. crude oil inventories are expected to fall below 425 MMbbls (million barrels) for a further upside in oil prices. The US benchmark, West Texas Intermediate (WTI), was up 0.35 per cent at $60.63 at the time of writing after hitting a June 2015 high of $60.73 earlier.

Oil prices posted their strongest start to a year since 2014 on Tuesday, with crude rising to mid-2015 highs amid large anti-government rallies in Iran and ongoing supply cuts led by OPEC and Russian Federation.

While the OPEC-led deal "leaves room for an earlier exit than currently scheduled, we now reflect this resolve in our supply forecast, with full compliance for longer and a more modest exit rate", Goldman analysts said in the research note.

Global benchmark Brent Crude futures also rose, supported by ongoing supply cuts by top producers OPEC and Russian Federation as well as strong demand from China.

For the whole of 2017, Russia's average annual oil production increased for a ninth year in a row.

Computer outage at customs causes major travel headache at JFK Airport
Photos posted on social networks by stranded passengers showed long lines at New York's JFK and Atlanta's Hartsfield-Jackson. A few minutes later, another tweet said the customs processing issue was resolved.

US oil production, driven largely by onshore tight shale oil fields, has risen by nearly 16 per cent since mid-2016, to 9.75 million bpd at the end of past year.

Oil prices have lost ground in the days following last week.

"Output is likely to hold around current levels following the recent decision by OPEC and non-OPEC producers to extend the cuts to the end of 2018", the International Energy Agency (IEA) said in its December review. Iranian oil industry and shipping sources said protests have had no impact on oil production or exports so far.

Oil markets have been supported by a year of production cuts and strong demand from China.

October U.S crude production rose 167,000 barrels per day to 9.64 million bpd, according to the EIA's monthly production report.

Only rising USA production, which is on the verge of breaking through 10 million bpd, is weighing on the price outlook for 2018.

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