Oil Prices Jumped to the New High Since 2014

Oil Prices Jumped to the New High Since 2014

Oil Prices Jumped to the New High Since 2014

With oil prices reaching their highest point in three and a half years, back patting will be in order when energy ministers from OPEC gather with their non-OPEC partners today.

Oil prices are also supported by the geopolitical risk premium, with the possibility of fresh sanctions on Iran and Venezuela spiraling further into crisis both threatening to take more barrels of supply from the market in the coming months. All parties are looking to offset the United States shale boom that continues unabated.

Crude futures were already higher ahead of the release after the American Petroleum Institute reported a 1-million-barrels drop on Tuesday afternoon.

Also, Canada's Kinder Morgan admits that its planned Trans Mountain pipeline may be "untenable" due to resistance from BC.

At the gathering in the Saudi city of Jeddah, OPEC and Russian Federation will discuss prolonging their cooperation, including new inventory targets that extend their output cuts beyond this year.

Brent crude oil futures were up 0.87 percent at Dollars 74.08 per barrel, from their last close while US West Texas Intermediate (WTI) crude futures were up 0.74 percent, at USD 68.98 a barrel.

McArthur charged with eighth count of first-degree murder
Police have said they plan to search at least 70 more properties where they believe McArthur, a self-employed landscaper, worked. Last week, McArthur was charged in the death of 42-year-old Abdulbasir Faizi, who disappeared from the gay village in 2010.

Crude climbed to the highest since 2014 after across-the-board declines in US stockpiles of oil, gasoline, diesel and jet fuel signaled increasing tightness in supplies.

Global resource stocks were the winners from Thursday's higher in prices.

Yields on US two-year Treasuries stood at levels last visited in 2008 at 2.43 per cent and 10-year German yields went above 0.57 per cent for the first time in nearly a month. "Despite the influence of U.S. shale, Saudi Arabia still calls the shots on global oil markets, and it's increasingly obvious the Saudi's are comfortable with oil at $80 or more", said Lee Wild, head of equity strategy at Interactive Investor.

"Some of this restricted (Opec) oil production might start to return to the market", he added. Oil stocks in developed economies in February stood a mere 43 million barrels above the latest five-year average, down from 340 million barrels above in January 2017. This would shift the initial goal of the scheme and would see it morph into an effort to drive prices up past $80, or possibly even $100, a barrel.

The impression is that oil prices are seen as not yet high enough to encourage sufficient oil investment.

Related news