Forecast for continued growth in Oil Prices
Recently the global oil prices achieved its highest level for over two years, reaching $59 a barrel end of September. Whilst this price is near twice the numbers recorded back in 2016 there has been a relatively cautious reaction to this promising price change.
Factors such as the general agreements on output restraints, delivered by OPEC late last year and its recent extension has influenced market growth. Major improvements in efficiency such as within the US shale industry has meant the US is capable of generating profits at anything above the $50 a barrel mark.
Oil prices rose again this week mainly due to the supply concerns within the Middle East and a combination of surging demand in Asia and the tightening of the US market. With potential supply disruptions occurring in the Kurdish region, analysts believe oil prices will continue to remain above $50.
Meanwhile, the recent series of hurricanes to hit the USA have affected overall oil production with the number of US drilling rigs declining for the third time this month.
Within Asia, consumption continues to remain very strong, particularly within India and China. India imported a record amount of over 4.8 million barrels per day in September.
Data does suggest that oil supplies are tightening and as a result, higher prices are likely in the next year. Local analysts support the data expecting a global rise in oil prices throughout the remaining parts of the year due to rising demand from households, particularly in the West.
Recovering economy is driving the change in oil production and overall demand.
However, industry experts stress how disruptive technologies of the future, such as electric vehicles will have a massive impact on oil prices. The growth of this technology will impact the overall demand for oil substantially.
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