Continuing its upward march for another session, crude oil futures traded 0.27 per cent higher at Rs 4,047 per barrel today as speculators raised bets, taking positive cues from the global market. Earlier this week, West Texas Intermediate (WTI) reached US$63.7 per barrel, its highest level since December 2014.
On the other hand, Commerzbank experts say that the OPEC and their OPEC+ allies can help their shale rivals to strengthen their position in the global market amid higher oil prices, which is something they don't want.
Just last week, as the Brent crude oil price hovered over $67 per barrel, the analysts pegged that it would touch $70 soon.
Responding to the severe crash and deflation in the price of oil in the late 1990s, merger activity helped improve economies and scale of production for these companies and today they control almost 5% of the world's oil and natural gas reserves.
Crude oil prices then have rallied continuously with most oil prices hovering near a two and a half year high and a three year high as the markets continuously raised overall positive sentiments and upbeat price targets for the commodity.
"Brent oil will remain range bound in the Dollars 65 region until there is more clarity on the U.S. counter-move", it added. While the oil market is balancing, there is still some room for improvement, United Arab Emirates Energy Minister Suhail Al Mazrouei, also OPEC president for 2018, said at a conference in Abu Dhabi.
OPEC and its partners chose to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.
Mr. Mallinson said Chinese imports were up by about 800,000 barrels a day on average a year ago and forecast imports to grow by a further 400,000 to 500,000 barrels a day over 2018.
Brent crude futures rose 61 cents to settle at $69.87 a barrel.
Yet despite fears, recent rising oil prices have found support from eight consecutive weeks of United States crude inventory drops.
USA commercial crude stocks fell by nearly 5 million barrels in the week to January 5, to 419.5 million barrels.
Data from RAC Fuel Watch shows that the cost of a barrel was last over $70 on 3 December 2014 when a price of $70.22 was recorded.
And in addition, oil-burning power plants in New England which rarely get used all year have been running hard, contributing one-third to ISO New England's power generation fuel mix at times.
While major oil producing countries like Nigeria appreciates this trend in view of rising revenue potentials, analysts are quick to caution that markets may be overheating. U.S. distillate stocks jumped 8.899 million barrels the week ending December 29 to 138.8 million barrels. In December, China's crude imports fell 9% month on month to 33.7-million tonnes, or 7.97-million bpd, customs data showed.
For more information on crude oil, visit the S&P Global Platts website.