Brent oil prices increased 1.99% or US$1.22, as prices rose this week. Oil traded on December 14, 2017 at a price of $62.44 per barrel relative to US$61.22 last week. Brent oil began the year at US$56.00 per barrel.
87 Octane prices declined week over week, by 1.07% (JMD$1.30). Additionally 90 Octane fell by 1.05% or $1.30 week over week. 87 Octane and 90 Octane opened the year at $97.32 and $98.98 respectively and now trades at J$119.72 and J$122.56 per litre.
Figure 1: Petrojam, U.S. Gulf Coast Conventional Gasoline Regular and Brent Crude Oil 1 Year Price History
This Week in Petroleum
EIA forecasts a mostly balanced oil market in 2018
The U.S. Energy Information Administration’s (EIA) December Short-Term Energy Outlook (STEO) expects global liquid fuels demand to increase in 2018, but not keep pace with supply growth, resulting in global liquids inventories increasing modestly in 2018. STEO forecasts increasing global liquid fuels inventories by an average of 50,000 barrels per day (b/d) in 2018, a downward revision from a 290,000 b/d inventory increase forecast in the November STEO . The change in STEO is driven by upward historical revisions to Chinese consumption and downward revisions to forecast production from countries within the Organization of the Petroleum Exporting Countries (OPEC).
On November 30, 2017, OPEC announced an extension of its agreement to reduce crude oil production through the end of 2018, which was broadly in line with both EIA’s November STEO and market expectations in the days leading up to the meeting. The non-OPEC countries that agreed to crude oil production cuts in 2017 also agreed to continue limiting output through the end of 2018. Saudi Arabia and Russia will co-chair a monitoring committee designed to assess the group’s adherence to the production targets. The group plans to reassess target production levels at their June 2018 meeting in the context of market conditions at that time. EIA estimates OPEC crude oil production averaged 32.5 million b/d in 2017, a 0.2 million b/d decrease from 2016 levels, and forecasts OPEC crude oil production to average 32.7 million b/d in 2018.
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