The Organisation of Petroleum Exporting Countries (OPEC) has said the average price of its members’ crude grades (OPEC Basket) rose by 70 per cent in two years to $73.27 per barrel (bbl).
Oil prices crashed globally in 2014 from over $100 per barrel to below $30 per barrel. However, from 2016, prices started to rally to $40 and above per barrel, and have continued to $70 and $80/bbl.
OPEC document (August/September 2018 OPEC Bulletin) made available to The Nation said: “Since the end of 2016, the OPEC Reference Basket has increased by nearly 70 per cent, gaining $30 to average $73.27/bbl in July 2018. During the same period, ICE Brent improved by 60 per cent to reach $75/bbl, while NYMEX WTI rose by 55 per cent to settle above $70/bbl, for the first time since late 2014, at $70.58/bbl.
“Oil prices increased during this period amid decreasing oil inventories, which have switched from showing a huge over-hang to the five-year average at the end of 2016, to now standing at a deficit. Furthermore, robust global demand and growing geopolitical tension have supported the rise in crude oil prices. In addition, an all-time record increase in financial market trader activity also contributed to bullish sentiment.
“On the product side, fuel prices globally trended upwards in 2018 in response to rising crude prices. In the US, gasoline prices reached a 33-month record high of $96/bbl in May, up by 30 per cent compared to $75/b a year earlier. At the same time, refinery margins performed well, reaching a high of $18.55/bll during the same month, both due to refineries being offline during peak maintenance, as well as healthy product demand.