Oil Prices Starting The New Year Strong
Maybe this will be the year that the roller coaster starts climbing again. The roller coaster I am referring to is the always volatile oil market. A market where fluctuations in prices send ripples through the economy and households of South Louisiana.
According to a report from Reuters, oil prices are posting their strongest opening since 2014. The reasons for the uptick in oil prices have to do with production and politics. In other words, business as usual in the oil field.
The current anti-government rallies in Iran have many investors bullish on oil investments for the upcoming year. The fact that OPEC and Russia have already instituted production cuts which are expected to remain in place for all of 2018 is another reason that the industry could be starting to turn the corner from the recent record low prices for the commodity.
Both West Texas Intermediate Crude and Brent Crude futures will start 2018 above $60 a barrel. West Texas Intermediate was at $60.63 early this morning while Brent LCOc1, the international benchmark opened trading at $67.18.
Just how high the price will rise will be impacted by the ongoing unrest in Iran and U.S. production. According to some reports U.S. crude production is as much as 10 million barrels per day. Depending on how tightly U.S. producers monitor their production could have a major impact on price increases.