Thursday, June 28, 2018

the price of oil jumped 2 dollars a barrel yesterday

stand by for gas price hikes after a couple weeks of lulling us into a sense of security

Oil prices steadied on Thursday, with U.S. crude near a 3-1/ 2- year high, but supply remained tight with investors concerned by the prospect of a big fall in crude exports from Iran due to U.S. sanctions. U.S. light crude was down 5 cents at $72.71 per barrel by 1331 GMT, after hitting $73.06 on Wednesday, its highest since November 2014.

Oil prices have been rallying for much of 2018 on tightening market conditions due to record demand and voluntary supply cuts led by the Middle East dominated producer cartel of the Organization of the Petroleum Exporting Countries (OPEC).

Unplanned supply disruptions from Canada to Libya and Venezuela have added to those cuts.

Yet not all indicators point towards an ever-tightening market.

Although output growth is slowing, U.S. crude production is approaching 11 million barrels per day (bpd).

With Russia and Saudi Arabia at similar levels, and output expected to rise as OPEC and Russia ease their supply restrictions, there will soon be three countries pumping out 11 million barrels of crude each and every day.

This unprecedented output means just three countries are meeting a third of world consumption.

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