Expectations of robust oil demand growth and high OPEC and allies' commitment to the production cuts have prompted analysts to raise again their forecast for oil prices in 2018, and they now see WTI averaging $55.78 per barrel next year. Brent crude, the worldwide benchmark for oil prices, went up 10 cents to $65.35 a barrel, while U.S. crude added 12 cents at $58.59, Reuters reported. The spread between the benchmarks widened throughout the year, as Brent responded to the drawdown in supply from major world producers while USA output continued to grow.
Trading was typically thin at year end, with many traders on vacation.
U.S. West Texas Intermediate (WTI) crude futures CLc1 settled at $60.42, the highest close since June 2015. Brent crude futures fell 11 cents to $66.33 a barrel.
Earlier this week, an explosion at a crude oil pipeline feeding Libya's biggest oil export terminal sent WTI briefly breaking above $60 per barrel on concerns over yet another sudden supply disruption, just as the operator of the Forties Pipeline in the North Sea, Ineos, said on Thursday that it expected to bring the pipeline progressively back to normal rates around new year. Inventories excluding the nation's strategic reserve have declined more than 11 per cent in the previous year.
Oil markets have tightened after a year of production cuts led by Middle East-dominated Organisation of the Petroleum Exporting Countries (OPEC) and Russian Federation.
Countering those cutbacks, USA oil production has soared more than 16% since mid-2016 and is approaching 10 million bpd, trailing only OPEC kingpin Saudi Arabia and Russian Federation. Analysts expect production to top 10 million bpd in the next few weeks and to keep growing, limiting efforts by other producers to cap global supplies.
In worldwide markets, China has issued crude oil import quotas totalling 121.32 million tonnes for 44 companies in its first batch of allowances for 2018.
Armed men blew up a Libyan pipeline pumping crude oil to Es Sider port on Tuesday, reducing the North African country's output by around 90,000 barrels a day, military and oil sources said.