U.S. commercial crude oil inventories fell almost 5 million barrels in the week to Jan. 5, to 419.5 million barrels.
That’s slightly below the five-year average of just over 420 million barrels.
Fuel price hedging company Global Risk Management said in its 2018 outlook that “the likelihood of elevated oil prices this year seems imminent”, largely due to the ongoing supply cuts led by OPEC and Russia as well as political risk especially in Iran, Venezuela and Libya.
Global Risk Management said this was despite U.S. oil production, currently at 9.5 million barrels per day (bpd), likely breaking through 10 million bpd.
Another factor that may hamper crude prices would be a drop-off in orders from refineries.
In Asia, Singapore average refinery profit margins have fallen below $6 per barrel this month, their lowest seasonal level in five years.
As a result, some refiners have already scaled back their output, reducing demand for feedstock crude.
Taking into account price supportive and pressuring factors, a market survey of over 1,000 energy professionals conducted by Reuters in January showed crude oil price expectations clustered in a range of $60-$70 per barrel for 2018.
Source : CNBC