Oil and Gas

Oil resurrection sets stage for another Opec-shale clash

Oil continued its revival from the biggest crash in a generation, with prices set for a second annual gain after a year marked by hurricanes, Middle East conflict and the tussle between Opec and US shale.

Futures are up more than 12 per cent in 2017, having entered a bull market in September. In 2018, investors will watch whether rising prices trigger a new flood of US output.

Oil topped natural gas as the biggest source of electricity in New England on Thursday morning, after temperatures plunged well below freezing.

US output has surged overall this year, hitting a 46-year high in October when producers pumped 9.6 million barrels a day, according to federal data. The US expects production to top 10 million barrels a day in the coming year. “The current highs are unsustainable in the short-to-medium term, with prices likely to head back below $60 once we get past January, but for now the season of goodwill appears to be in full swing,” said analysts led by Michael dei-Michei at consultants JBC Energy in Vienna.

West Texas Intermediate, the US benchmark, is now trading at the highest level since mid-2015, pushed above $60 a barrel by a severe cold snap in the northeastern US that spiked demand for heating fuel.

Show More