Oil spurt 30 per cent to USD71
The Crude oil prices both Brent and WTI surged more than 30 per cent, since Mid December 2018. The Brent Crude at present is trading at US$70.6 a barrel. The factors that have spurred the oil prices are robust demand (strong US employment data) on the one side and production cut from the OPEC and allied nations. Also, the US sanctions on Iran and Venezuela are contributing to the oil price rally.
OPEC and other countries such as Russia have cut oil production by nearly 1.2 million barrels per day this year. OPEC+ will review this production cut at the end of June this year. However, crude oil production in the United States hit to a record high of 12.2 million barrels per day.
Meanwhile, the US parliament is looking for legislation called NOPEC which would prevent OPEC from coordinating production cuts. But there no clarity that the US Congress will pass the bill. But to protect their sovereignty large oil producers have threatened to trade in currencies other than the US dollar.
Following chart shows the price trend of Brent Crude over last three months:
